India's SAIL to Join Posco for FINEX Processing Plant in October

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's state-owned steel producer Steel Authority of India Limited (SAIL) (BSE:500113) will sign a formal joint venture agreement in October 2010 with POSCO (KRX:005490) (Seoul, South Korea) to put up a FINEX processing plant at SAIL's Bokaro steel plant, which is in Jharkhand state.

"A memorandum of understanding between SAIL and POSCO was signed in April 2010 for the proposed FINEX processing plant at Bokaro," said senior officials of the Bokaro steel plant. "The finer details, like the nature of the joint venture and required investments, will be finalized, and a formal agreement signed with POSCO in October 2010. Actual production from the Finex plant will commence two to three years thereafter."

The FINEX technology uses non-coking coal fines and iron-ore fines, which are easily available in India, to produce high-grade steel, which will be further processed by SAIL to produce specialized steel. India currently mines about 103 million tons of iron-ore fines, 85% of which is exported to China because of a lack of demand from the domestic steel industry.

The setting up of FINEX processing is part of a modernization and expansion of the Bokaro plant that will ramp up capacity from 4 million tons to 7 million tons.

"The technology agreement with POSCO is one among the many technologies that are being scouted by SAIL," senior officials of SAIL said. "Negotiations are on schedule with Kobe Steel Limited, Japan for its ITMK3 technology, and an agreement will be concluded by March 2011." Kobe Steel's ITMK3 technology will enable SAIL to use iron-ore fines and thermal coal to produce steel.

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