South Korean steel maker Posco is now pinning its hope on Sajjan Jindal-led JSW Steel to realise its long cherished ambition of an integrated steel plant in India after failing to do so on multiple occasions over the past two decades.
On Tuesday, Posco Group and JSW Group signed a memorandum of understanding to set up a greenfield steel plant in India, with an initial capacity of 5 million tonnes (mt).
Moreover, the two groups will explore collaboration in battery materials related to electric vehicles (EVs) and renewable energy to meet the requirements of the proposed unit.
The location of the plant has not been announced. However, JSW is expected to arrange for the land parcel. The flagship of the ₹24-billion JSW Group has land banks in Bengal’s Salboni, Maharashtra’s Dolvi, Karnataka’s Vijaynagar, apart from Odisha.
The Odisha government has assigned to JSW a land parcel previously earmarked for Posco which had signed an MoU with the eastern state to set up a 12mt plant in 2005, promising a $12 billion investment. Faced with discontent over land acquisition and changes in mining laws, Posco called off the project in 2015.
Over the last two decades, Posco tried to court a few other public and private sector
companies to build a steel plant in India, one of the fastest growing markets for the alloy outside China.
The latest attempt by the Korean major was in January 2022 with Adani Enterprises where the two entities signed a non-binding MoU to set up a 5mt plant in Mundra, Gujarat, for $5-billion investment.
Adani Enterprises did not respond to a request for a comment on the progress of the project on Tuesday. The latest annual report of the company or the investor presentation filed with the bourses after the second quarter results on Tuesday does not mention the Posco project.
The MoU with JSW was inked at JSW Group’s corporate headquarters in Mumbai in the presence of JSW Group chairman Sajjan Jindal, Posco chairman Chang In-hwa and senior executives from both the business houses.
Jindal hailed the ‘‘tremendous opportunity’’ that India offers to steel makers and described the MoU as a ‘‘significant step forward’’ towards JSW’s journey. “This JV also entails collaboration for renewable energy for a state-of-the-art integrated steel plant and for setting up an EV ecosystem in India,” Jindal said.
Earlier this year, JSW ventured into passenger vehicles with a joint venture with MG Motors focusing on EVs.
JSW Steel will close 2024-25 with capacity of 34.2mt and reach 42mt by end of 2026-27.
According to the World Steel Association, Posco was the 7th largest steel maker in 2023 with 38.44mt output compared with JSW Steel which was at 12th position. In India, Posco has a downstream unit in Maharashtra.
Commenting on the MoU, Chang In-hwa said, “We are delighted to strengthen our ties with the JSW group. This collaboration will contribute significantly to the economic development of Korea and India and drive our joint efforts towards a more eco-friendly and sustainable future.”
