Indian PSU Steel Authority of India Limited, SAIL, and Japan's Kobe Steel will sign the final pact next week for a joint venture to set up a plant to produce iron nuggets while investing around Rs. 1,500 crore.
AS PER media reports the memorandum of agreement between the two companies will be signed in the presence of Indian steel minister Beni Prasad Verma who will be on a visit to Japan next week.
The steel minister has told media persons that the project will be a 50:50 venture. The joint venture, which has been named as SAIL-Kobe Iron India Pvt. Ltd, has already been incorporated.
Kobe steel will be the technology provider in the venture that would use Iron Making Technology Mark-3 for producing iron nuggets from iron ore fines.
Both the companies are jointly preparing a detailed project report (DPR) that is expected to be complete by October 2012 to set up the 0.5 mtpa production plant at SAIL's Alloy Steel Plant in Durgapur.
Meanwhile, as per media reports SAIL is set to invest over 2,000 crore rupees to increase the capacity of its Gua iron ore mine in Jharkhand to 10 million tonnes per annum (mtpa) from the current 2.5 mtpa. The company is also thinking to invest more than 850 crores to put up a four mtpa pelletisation plant.
The report suggests that for increasing the capacity at the mine techno-commercial discussions are underway. It is expected that by October the company will finalize the contracts for the development of the mine.
Due to the lack of forest and environmental clearances the mine could produce only half a million tonne iron ore during the last fiscal, which is lesser by two million tonnes of its current production capacity.
Notably, the mine is closed since June last year in the wake of environment clearances sought by the ministry of environment. The state-run company has submitted wildlife conservation plan to the ministry in its bid to re-open the Gua mine soon as it supplies iron ore to the company's steel plants in West Bengal's Burnpur and Durgapur.
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