SAIL, Posco bury hatchet ahead of steel minister's visit to Seoul

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)

Korean Broadcasting Service team visits Orissa

Tuesday, 11 Oct 2011

BS reported that /worried over the inordinate delay in implementation of mega steel project proposed by POSCO India in Orissa, a 4 member team of the Korean Broadcasting Service, based out of Seoul held talks with the state Chief Secretary Mr BK Patnaik.

The media team from Seoul visited the POSCO site before meeting with Mr Patnaik to take stock of the ground level progress.

The team was eager to know of the reasons that have held up the big ticket project.

Mr Patnaik told reporters after talks with the Korean media team that “The visiting media team from Korea enquired about various aspects of the project. They questioned whether local opposition has held up the project. We informed them people in five out of seven villages are in favour of the project.”

Besides, he told the team members that though the project was six years old, the final forest clearance for it was received only recently.

(Sourced from BS)

Nippon, POSCO, others in $1.8 bln Brazil rare-metal deal

Thu Mar 3, 2011 4:24am GMT

* Japanese group to take 10 pct of Brazil's CBMM - NPS
* POSCO, NPS to buy 5 pct, invest about $312 mln each - NPS
* Deal values unlisted CBMM at around $12 bln
* Asian countries in race to secure metals used in auto steel
By Hyunjoo Jin and Ju-min Park

SEOUL, March 3 (Reuters) - Nippon Steel Corp , JFE , POSCO and others will buy a 15 percent stake in a Brazilian rare metal miner for around $1.8 billion, South Korea's National Pension Service (NPS) said on Thursday.

The deal adds to a growing cross-border tie-ups by Japan and South Korea to secure natural resources to power their manufacturing-based economies.

The Brazilian company is Companhia Brasileira de Metalurgia e Mineracao (CBMM), which mines and processes niobium, a rare metal used to produce high-grade steel used in autos, aerospace and pipeline to make steel products lighter and stronger.

Brazil is the world's No. 1 Niobium producer. The Brazilian mining industry association (IBRAM) data said Brazil produced 80,000 tonnes out of world production of 83,000 tonnes produced globally in 2010 and the ratio has been similar in the last decade.

CHINA VS JAPAN, KOREA

"Behind the move is a growing demand for niobium in China, and its aggressive move to secure supplies from abroad because its domestic output is very limited," said Kaz Machida, president of KAY International, a rare metal consultant.

"Japanese steelmakers, worried of China's aggressive moves, moved quickly in a tie-up with Korean firms," he said.

China's domestic niobium production is limited, although demand is expected to soar in the future. In contrast, China has rich rare earth supplies, producing 97 percent of the minerals.

An NPS spokesman said Japanese investors including Nippon Steel, JFE Holdings and trading firm Sojitz Corp will buy a 10 percent stake in CBMM.

South Korea's POSCO and National Pension Service will jointly buy 5 percent of the unlisted company, investing around 350 billion won ($312 million) each, the NPS spokesman said.

"Resources assets tend to generate higher returns and the joint investment with industry specialists such as steelmakers will generate more synergies," the spokesman said.

The deal values the unlisted CBMM at around $12 billion.

Another Japanese-Korean consortium is bidding to develop the world's largest untapped coking coal deposit in Mongolia, while Japanese trading firm Itochu Corp and six Asian steelmakers paid about $3 billion for a 40 percent stake in Brazilian iron ore miner Namisa in 2008. (Additional reporting by Yuko Inoue in Tokyo and Peter D. Murphy in Brasilia; Editing by Jonathan Hopfner and Lincoln Feast,sourced:Thomson Reuters)

Tags :(CBMM), high grade steel metal, aerospace, pipeline, steel products, IBRAM, Mongolia, raw material, steel mills