Adani plans steel foray via POSCO JV, $5 billion earmarked

Gautam Adani-led Adani Group has signed a pact with South Korean steel major POSCO to explore business opportunities, which would include setting up of an integrated steel miss in Gujarat with an estimated investment of up to $5 billion, the companies said in a joint statement on Thursday.

Through the non-binding agreements, the two companies also intend to further collaborate at the group level in other businesses like renewable energy, hydrogen, and logistics that are aimed towards carbon reduction.

“POSCO and Adani are able to come to great synergy in the steel and environment-friendly business with POSCO’s state-of-the-art technology in steel making and Adani’s expertise in energy and infrastructure. I hope this cooperation will be a good and sustainable business cooperation model between India and South Korea,” said Jeong-Woo Choi, chief executive officer, POSCO.

The companies said that they intend to use renewable energy resources and green hydrogen, in line with their respective environmental, social and governance (ESG) commitments to sustainability and energy efficiency. They are examining various options to cooperate and leverage the technical, financial, and operational strengths of each company, the statement said.

“This partnership will contribute to the growth of India’s manufacturing industry and the Aatmanirbhar Bharat scheme championed by the Government of India. It will also help to strengthen India’s standing in green businesses,” said Gautam Adani, chairman of the Adani Group.

POSCO currently operates a 1.8-million-tonne cold-rolled and galvanized mill in the western state of Maharashtra. While it faced a setback when it had to scrap its $12-billion project in Odisha amidst delays and local opposition about five years ago, POSCO is believed to be keen to setting up a greenfield plant in India.

Adani Group has earlier said that it will invest over $20 billion in renewable energy generation over the next decade. The group plans to invest between $50 billion and $70 billion, through organic as well as inorganic route, across the entire green energy value chain.