3 Nov, 2011 |ET Bureau
NEW DELHI: Steel Authority of India (SAIL) and Korea's Posco have largely settled their differences over the proposed 3 million tonne plant the two companies plan to build at Bokaro, ahead of a visit to Seoul by Union steel minister Beni Prasad Verma on November 6.
The differences were related to pricing of a key raw material and on the quantum of equity stakes for the two partners, said a person familiar with the negotiations. A team from Seoul has been working on details of the proposed agreement with SAIL over the last few days. They may, however, not have it ready before the minister's trip since any strategic alliance will have to be cleared by SAIL's board of committee.
The Korean steelmaker that will bring the patented non-coking coal steelmaking technology FINEX to the joint venture has agreed to SAIL's offer of iron ore fines at a 10% discount, said the person cited earlier. Posco had earlier wanted a 20% discount to market prices.
SAIL on its part has conceded to Posco's insistence on a majority equity stake. Posco had maintained that the Korean government which had funded the development of FINEX, would not okay a joint-venture involving the critical technology in which Posco had less than 51% stake. "Future joint ventures with SAIL could be on an equal partnership basis," said the person who is also involved in the discussions.
The two companies are still trying to sort out differences on whether SAIL could retain a first right of refusal for any future agreements with the Korean steelmaker. SAIL will be the first company to try out the FINEX technology outside of South Korea. According to sources, while Posco had offered to keep SAIL informed in such a situation, it didn't offer a first right to refusal. Posco's 12 million tonne plant in Gopalpur, Orissa will also use the FINEX technology.
(sourced EconomicTimes)
NEW DELHI: Steel Authority of India (SAIL) and Korea's Posco have largely settled their differences over the proposed 3 million tonne plant the two companies plan to build at Bokaro, ahead of a visit to Seoul by Union steel minister Beni Prasad Verma on November 6.
The differences were related to pricing of a key raw material and on the quantum of equity stakes for the two partners, said a person familiar with the negotiations. A team from Seoul has been working on details of the proposed agreement with SAIL over the last few days. They may, however, not have it ready before the minister's trip since any strategic alliance will have to be cleared by SAIL's board of committee.
The Korean steelmaker that will bring the patented non-coking coal steelmaking technology FINEX to the joint venture has agreed to SAIL's offer of iron ore fines at a 10% discount, said the person cited earlier. Posco had earlier wanted a 20% discount to market prices.
SAIL on its part has conceded to Posco's insistence on a majority equity stake. Posco had maintained that the Korean government which had funded the development of FINEX, would not okay a joint-venture involving the critical technology in which Posco had less than 51% stake. "Future joint ventures with SAIL could be on an equal partnership basis," said the person who is also involved in the discussions.
The two companies are still trying to sort out differences on whether SAIL could retain a first right of refusal for any future agreements with the Korean steelmaker. SAIL will be the first company to try out the FINEX technology outside of South Korea. According to sources, while Posco had offered to keep SAIL informed in such a situation, it didn't offer a first right to refusal. Posco's 12 million tonne plant in Gopalpur, Orissa will also use the FINEX technology.
(sourced EconomicTimes)
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