India's largest steel maker SAIL today inked the final pact with Japan's Kobe Steel to set up a 500,000-tonne plant in West Bengal to produce a key steel making raw material.
The facility entailing an investment of Rs 1,500 crore would use Kobe's specialised technology ITmK3 (iron making technology mark three) to produce nuggets to be shared equally by the partners for captive use, an official release said.
The agreement was signed by SAIL Chairman C S Verma and Kobe Steel President & CEO H Sato in the presence of Steel Minister Beni Prasad Verma in Tokyo.
"The ITmK3 technology will also utilise dump iron ore fines, disposal of which is an environmental issue," the statement said quoting the Steel Minister, who also expressed hope that there would be more projects for the Indian steel industry with the help of Japanese technology.
ITmK3 technology has successfully replaced coal as an input material for iron making and is recognised for its low energy consumption and environment friendliness.
Kobe Steel is one of the prominent steel makers of Japan, which is the world's second largest steel producing country. It is also one of the largest suppliers of alloy steels to Japanese automobile companies.
"The SAIL-Kobe Steel JV project will harness the strengths of both the leading steel companies. While SAIL will contribute land, iron ore and other engineering services for the project, Kobe steel will provide the technology for setting up the plant and its operation," the statement said.
A joint venture company "SAIL-Kobe Iron India Pvt Ltd" in which SAIL and Kobe Steel hold equal equity, has already been incorporated. The raw material for the joint venture would be supplied from SAIL's Gua mines in Jharkhand.
The statement added that partnership with Kobe gives "an opportunity for Indian steel firms to enter into strategic relationships with Kobe Steel so that strengths of respective companies could be leveraged."
SAIL and Kobe Steel had earlier signed a pact on March 30, 2010 for conducting a joint feasibility study for exploring and commercialisation of ITmk3 technology developed by Kobe for production of iron nuggets used for steel production.