New Delhi: World's fourth largest steel firm Posco will shift its first Finex plant to India from Pohang in South Korea.
Posco, which has already signed an initial joint venture pact with city-based Mesco Steel, will start dismantling the unit at Pohang in next quarter, Mesco Steel said in a statement today.
"The definitive agreement will be signed within the next quarter and the joint venture will have POSCO taking up a minority share. Pre-engineering work to dismantle the plant at Pohang shall start in the next quarter," Mesco said.
Posco's patented Finex is an iron making technology which has "significant potential to reduce operating cost" as it eliminates the reliance on expensive coking coal.
The Korean major had signed an agreement with state-run Steel Authority of India for setting up a steel unit using the same technology, but it never took off owing to shareholding issue.
However, Posco would be satisfied with a minority stake in its joint venture with Mesco Steel for relocating the plant at Kalinganagar in Odisha.
The Pohang plant has six lakh tonnes per annum capacity.
"This is just the first step towards our long term relation with POSCO. We are yet to discuss the details of the deal," Mesco Steel CMD Rita Singh told PTI.
"With this technology coming from POSCO we hope that steel production costs will be tremendously reduced," she added.
Mesco said, the project is a part of the USD 700 million first phase steel expansion project to take its capacity to 2 million tonnes.
Mesco Steel currently operates 2 blast furnaces in its plant at Kalinganagar and the hot metal is cast as Pig Iron.
The company also operates an iron ore mine in Barbil region and has another iron ore mining lease at Malangtoli in Odisha.
Posco now has 38 million tonnes per annum steel-making capacity. It had been eyeing the Indian market for long. The company is also setting up an 8 mtpa steel plant in Odisha for which it has already acquired a large part of the required land.
