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POSCO signs MOU with India
for construction of integrative steelworks |
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Source: POSCO |
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On June 22nd, POSCO
signed an MOU with the Orissa State government of India for
construction of the world's first overseas integrative steelworks
and the development of a mine at Bhubaneswar, the capital of
Orissa.
The MOU was signed by Soung-Sik Cho, executive vice president
of POSCO, and B. Chatterjee, chief assistant secretary of the
Orissa State government's Office of Steel Production, in the
presence of POSCO CEO Ku-Taek Lee and N. Patnaik, the chief
minister of the State of Orissa, India.
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POSCO will first
construct the steelworks from 2007 to 2010 on about 4,085 acres
of land at Paradwip of Orissa, located in the northeastern part
of India, and produce 3 million tons of slabs per year.
The production capacity of this steelworks will first be expanded
to 6 million tons, and then ultimately to 12 million tons.
The construction will require US $3 billion in the first stage,
and is expected to reach US $12 billion to support a production
capacity of 12 million tons.
The construction will require U$3 billion in the first stage
and ultimately up to U$12 billion as the expansion will reach
up to 12 million tons of production capacity.
The Orissa State government promised to provide a total of 0.6
billion tons of iron sources, and will allow POSCO to use iron
ore from these sources over the next 30 years to ensure the
competitiveness of the steelworks in India.
The government will also provide infrastructures such as a railroad,
road systems, water supply, and electricity as scheduled, to
assist POSCO in the steelworks construction process. |
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In his address,
POSCO CEO Ku-Taek Lee stated : "I hereby declare that POSCO
is standing at the forefront of overseas steelworks construction
in the world, and that Korea and India have erected a new monument
for closer economic cooperation." He added, "the fact
that the Foundation Day of POSCO and that of the State of Orissa
are both celebrated on April 1st is a good sign that we can
become one and cooperate to lead this project to success."
Since the MOU has been established, a local subsidiary will
be established in India in August. After the validity of the
project is verified through a precision survey and economic
analysis, a final MOA will be signed before the end of this
year.
In the first place, Ground preparation will start at the beginning
of 2007, and second step is actual construction work will start
in early 2008.
POSCO India Steelworks will produce 3 million tons of slabs
per year from June 2010 as the first-stage of construction is
completed. POSCO will utilize its production not only for local
sales in India, but also for further processing and supply based
on demand in Korea.
This particular project is the world's |
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first overseas integrative
steelworks and is the greatest project in the history of Korea's
overseas investment. Many of world's largest steelmakers, such
as Mittal Steel and Arcelor, have been expanded through overseas
M&A, but POSCO will be the one and only steelmaker to construct
an integrative steelworks abroad.
As Korea's steel industry has entered the stage of maturity
with its steel consumption per capita reaching up to 1,000kg,
a world-class figure, and as large-scale expansion of facilities
in the steel industry have become saturated in Korea, POSCO's
grand project toward securing greater resources through the
construction of a steelworks in India is evaluated as a timely
move.
In particular, since slabs and other half-finished products
produced in the steelworks in India will be supplied to Korea's
steel industry, it will contribute to the stable supply of certain
steel components.
With this project, POSCO will expand capacity from its current
34 million tons to over 50 million tons and reinforce global
competitiveness through its overseas steelworks, starting with
India. |
Foreign investment cap in non-news hiked to 100
per cent
The Government of India has hiked
the foreign investment limit under non-news category from 74 per cent
to 100 per cent in the case of Indian entities publishing scientific/
technical/specialty magazines / periodicals/ journals. According to
the new guidelines, where both FDI and FII investment is envisaged,
the applicant may approach the FIPB/ RBI for clearance after obtaining
the No Objection Certificate (NOC) from the Ministry of I and B. In
cases involving only portfolio investment, the applicant may approach
RBI for further clearance, if any, after obtaining NOC from the Ministry
of I and B.
A press release by PIB has said that guidelines of the Ministry of
Finance on FDI and portfolio investment would apply.
All cases involving foreign investment shall be handled by the prescribed
agencies, viz. FDI on the government approval route through the mechanism
of the FIPB and portfolio investment by the RBI, said the release.
Title verification shall continue to be done by the Press Registrar
as per the existing procedure.
For print media, a group of ministers (GoM) headed by home minister
Shivraj Patil has been examining the issue of allowing Indian editions
of foreign newspapers for the last seven months.
The decision to allow FDI in print media was taken by the Vajpayee
government in 2002. |
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