Steel Authority of India (SAIL) will sign the final pact with Japan's Kobe Steel next week for a joint venture which will set up a facility to produce iron nuggets at an investment of Rs 1,500 crore.
The memorandum of agreement between the two parties would be signed in Japan during Steel Minister Beni Prasad Verma's visit to that country next week.
"I am going to Japan next week. This will be a 50:50 venture," Steel Minister Beni Prasad Verma told reproters here.
Incidentally, the two companies have already incorporated the joint venture on May 25 this year and named it SAIL-Kobe Iron India Pvt Ltd.
Steel Secretary D R S Chaudhary said the investment in the proposed facility would be around Rs 1,500 crore.
The joint venture would use Iron Making Technology Mark-3 (ITmk3) for producing iron nuggets from iron ore fines and non-coking coal to use in steel-making electric arc furnaces (EAFS). The technology would be provided by Kobe Steel.
A detailed project report is being jointly prepared by the two companies for setting up the 0.5 mtpa facility at SAIL's Alloy Steel Plant (ASP) in Durgapur, SAIL had earlier said, adding the report was expected to be ready by October.
"SAIL will need high grade ferruginous material as scrap substitutes (in future due to 100% continuous casting, scrap generation in its plants would come down substantially) for melting in EAFs and as coolants in Basic Oxygen Furnaces," the company had said.
SAIL and Kobe had also signed a Memorandum of Understanding in November 2010 for setting up a 1.2 mtpa gas-based steel plant to produce steel for auto sector. Financial viability of the venture is being worked out.
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