Posco signs pact to build $12 B steel mill in India

By agencies   |   Wednesday, 22 June 2005, 07:00 Hrs
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BHUBANESHWAR: POSCO, South Korea's largest steelmaker, said Wednesday it signed a memorandum of understanding to build an integrated steel mill in the eastern Indian state of Orissa.

Under the deal inked with the Orissa state government, POSCO will construct the steel mill between 2007 and 2010 and develop an iron ore mine at a total cost of $12 billion, the largest overseas investment project by any company so far in India.

If completed, the mill with four blast furnaces will produce 3 million tons of steel slabs a year, with the capacity to be expanded to 12 million tons by 2020.

POSCO also procured 600 million tons of iron ore through the investment, which the envisioned Indian mill can use for as long as 30 years.

The state government, in return, will provide infrastructure such as railways, roads, water and electricity for the steelmaker.

POSCO Chairman Lee Ku-Taek said that the investment agreement leaves the steel giant in a starting line to write a new chapter in world steelmaking history.

"POSCO is set to build an integrated steel mill overseas for the first time in the history of world steelmaking," Lee said after the signing ceremony.

POSCO said the slabs from the mill will be sold locally, while some will be shipped to South Korea, depending on demand situations.

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