August 10,
South Korean POSCO’s $12 billion steel mill project which is India’s largest foreign direct investment could be cleared soon after a panel investigating a breach of law in acquiring land for the plant submits its report on August 16, a top official said on Monday.
It is expected that a four member committee’s report will be submitted on August 16 after which a decision will be formally announced.
POSCO wants to build the mill and mine Iron ore in the East Indian state of Orissa. It signed a memorandum of understanding in June 2005 for the plant, which will use FINEX technology of steel making by using Iron ore fines.
FINEX eliminates the first step in the steelmaking process of sintering and coking and allows the direct use of low-cost ore fines and coal, bringing down the overall plant installation and operational costs.
So once this project gets started demand for low grade iron fines is expected to increase domestically and consequently the international supply may have an impact. Tighter supply situation may result in higher fines prices. A major amount of Iron ore fines from the Khandadharnear region in Orissa will be consumed by POSCO which will reduce the exports from this region.
Similarly, SAIL also hopes to form a joint venture with Japan’s Kobe Steel to set up a 0.5MT Steel Plant near Durgapur. Such new projects in India mean more requirement of the raw material domestically. It may be a little early to comment on its impact on present ban situation in the Southern coast but as and when these new projects which would be based on new technologies come through, it will have considerable impact on the domestic iron ore market.
Leave a Reply