South Korean steel producer POSCO has evinced interest in setting up a steel mill on land available at Indian state-run steel producer Rashtriya Ispat Nigam Limited’s (RINL) facility located at the southern Indian port town of Vishakhapatnam, India’s steel minister Dharmendra Pradhan told parliament on Thursday, February 11.
Pointing out that both POSCO and RINL signed a non-binding memorandum of understanding in 2019 and a joint working group of representatives of both companies was set up, the minister said that, though the shareholding pattern of the proposed partners has not been finalized, POSCO has stated that it will be seeking equity share of at least 50 percent in the project.
The minister, however, did not elaborate on the status of the joint venture proposal in the wake of the government earlier this month approving the privatization of RINL through 100 percent disinvestment of the government’s stake in RINL in favor of a private investor.
According to a steel sector analyst, though it is still too early to predict if POSCO will participate in the disinvestment process, the scales are heavily tilted in favour of its putting in bids for RINL after having worked towards a joint venture project in collaboration with the latter.
Underlining that any prediction of POSCO’s future moves will be speculative at this point in time, the analyst said that a controlling interest in RINL is “logical” considering that such a move will give the South Korean major a foothold in securing RINL’s exclusive long product steel mill, and that it would consider subsequent diversification of the portfolio into flat products instead of earlier plans of constructing a greenfield flat product steel mills within premises of RINL.