RINL privatisation forces steel major Posco to look for new plant locations

The logo of POSCO is seen at the company's headquarters in Seoul. (PC-Reuters)

Months after the Cabinet Committee on Economic Affairs (CCEA) gave in-principle approval for 100 percent divestment of Centre's stake in Rashtriya Ispat Nigam Limited (RINL), the move has prompted South Korean steel major Posco to explore new locations for setting up a steel plant.

"Posco has been exploring investment in India like other global steelmakers ArcelorMittal, but it has not made any progress," Business Standard quoted a source as saying.

Reports arrived that YS Jagan Mohan Reddy government in Andhra Pradesh had invited Posco to set up a plant in Krishnapatnam, however, the steel major is yet to take a decision.

Cabinet gives in-principle approval for 100% divestment in RINL

Vizag-based steel plant RINL has been reeling under losses over the past few years. It reported a loss of Rs 1,369 crore in 2017-18 and Rs 3,910-crore loss in 2019-20.

Pocso had signed a memorandum of understanding (MoU) to set up a 12 million tonne plant in Jagatsinghpur district in Odisha, but it has been 16 years that it has been trying to set up a steel plant in India. Change in mining policy and land acquisition issues have derailed its plans.

Earlier in February, Reddy had written to Prime Minister Narendra Modi to reconsider the disinvestment plans of RINL Vishakhapatnam. Now with Centre's plan in place, Posco's plan may be delayed further as it may have to relook for a different location.

Similar issues popped up with ArcelorMittal, which signed an MoUs for setting up mega steel plants in Jharkhand and Odisha in 2005 and 2006. It later entered India in December 2019 after acquiring Essar Steel under the insolvency law.