Tata Steel, SAIL explore joint venture

 
Mr S.K. Roongta

Source : BL Bureau:may18,2010

Kolkata, May 17
Tata Steel and Steel Authority of India Ltd (SAIL) have initiated discussions to float a joint venture to produce steel.
Giving this information here on Monday, Mr S. K. Roongta, Chairman, SAIL, said, “Discussion is at a preliminary level and nothing has been finalised as yet in regard to the details of the project such as capacity, investment, technology and the location of the plant.”
Tata Steel sources, when contacted, declined to comment.
ArcelorMittal too had evinced interest in joining hands with SAIL for a joint venture to produce steel, he said, adding that the details were being worked out. A recent report quoted Mr L. N. Mittal, CEO of ArcelorMittal, as saying that he was happy with the progress of projects in the country and in talks with SAIL for a joint venture.
There could be one joint venture or more than one with each of them, Mr Roongta said. He, however, declined to give any timeframe for the finalisation of the details and conclusion of the agreements.
Referring to the joint venture with Korean steel major Posco he said the two-million-tonne capacity plant, using Posco's patented Finex technology would be set up probably in Jharkhand, while the CNRO (cold-rolled non-grain-oriented) mill would be in Maharashtra. “The proposed CNRO plant would be different from the one being set up by the Korean steel giant itself also in Maharashtra,” he added.
Asked if the world steel giants were keen to join hands with SAIL because of the huge reserves of iron ore it had at its command, Mr Rungta replied, “it was for those companies to reply”.
Earlier, while addressing a meeting organised by the Merchants Chamber of Commerce, the SAIL Chairman pointed out that the government offer as early as 1990s inviting bids for IISCO, having an iron ore reserve of two billion tonnes, went unheeded.
Raw material prices
Expressing concern over rising raw material prices, the SAIL Chairman said that this was bound to have an impact on steel prices. Asked if SAIL would renegotiate prices with its customers, he said that there was no scope for such exercise in respect of long-term contracts accounting for less than 20 per cent of the total sale.
He also expressed concern over the rise in imports of steel to one million tonnes in April from the earlier level of around 500,000 tonnes a month, thus entailing nearly 100 per cent jump.
“While the international prices of raw materials have skyrocketed, there has not been any significant rise in steel prices,” he added.
International merchant banks appointed by International Coal Ventures Ltd had already done some due diligence and a few bids had been received. ICVL is a joint venture between CIL, SAIL, RINL, NMDC and NTPC, and Mr Roongta is its Chairman.