POSCO, Orissa sign long-awaited deal

POSCO, Orissa sign long-awaited deal

South Korean steel giant POSCO announced yesterday that it had signed a memorandum of understanding (MoU) with the Orissa government of India for the construction of a 12 million-ton steel plant and the development of a mine in Bhubaneswar, Orissa. In line with the deal, POSCO will construct a 3 million-ton steel plant that will see its capacity increased to 6 million tons and then to 12 million tons over time. The first stage of construction will cost $3 billion, with expected investment for the complete project estimated near $12 billion. The Orissa government will provide a total of 600 million tons of iron ore to POSCO over the next 30 years, ensuring that POSCO will be able to supply the necessary raw material to its planned steel plant. Furthermore, the Orrisa government will provide infrastructure such as railroad, water supply, and electricity. As per the MoU, POSCO will establish a subsidiary in India in August. A final deal is expected by the end of this year. Through this project, POSCO will be able to increase its annual production capacity from its current 34 million tons to over 50 million tons.