Visakhapatnam: Union Minister for Steel Dharmendra Pradhan stated on Wednesday that the South Korean steel giant POSCO has signed an MoU with Rashtriya Ispat Nigam Ltd (RINL) in October 2019 for the setting up of a steel plant in Andhra Pradesh.
In a reply to a question from Rajya Sabha member V Vijaysai, the minister said the non-binding MoU has been signed in October 2019 between RINL and POSCO. Pursuant to the MoU, a joint working group was formed for exchange of information. The share-holding pattern has not been determined at this stage.
However, as per the MoU, POSCO wished to have at least 50 per cent share-holding. The share-holding of RINL would be worked out on the basis of evaluation of RINL’s contribution of land for the setting up of the plant, the minister said.
POSCO may probably skip the Kadapa venture and the second steel plant it proposed on the vacant steel plant site, for which it had signed an MoU with the RINL in 2019.
Several changes in the POSCO plans would be seen in the next few months after the cabinet committee on economic affairs recently announced strategic sale of RINL, the flagship company of the Visakhapatnam Steel Plant.
Initially, on a request from the AP government, the Korean company evinced an interest in developing a greenfield steel plant with five million tonnes per annum capacity in Kadapa. Chief minister Jagan Mohan Reddy laid the foundation for the plant in Sunnapurallpalli village in Jammalamadugu mandal in Kadapa district on December 23, 2019. The government signed an MoU with NMDC for supply of ore.
“The state government is still looking for investors after POSCO did not evince interest. Only land acquisition process is going on now,’’ a source from Kadapa said.
“When the company is getting 22,000 acres of land and India’s only shore-based steel plant on a platter, why should it go all the way to Kadapa or build a new plant in the RINL premises,’’ Ch Narsinga Rao, state president of CITU, asked.
He said the whole state has been waiting to know who could be the final bidder for the RINL.
If it succeeds in taking over RINL, the Korean steelmaker will emerge the market leader and have access to the South East Asian markets besides catering to the domestic needs of special steel through rail and road, Rao said.
This is the second time POSCO is making a bid to build a steel plant in India. “In 2005, it signed an MoU with the Odisha government but it had to abandon this due to a delay in getting the pollution control board approvals and there was stiff opposition from the local people. The MoU expired in 2010.
