Mesco Steel in talks with Posco on Finex furnace

BHUBANESHWAR: Mesco Steel is in talks with South Korean steelmaker Posco to acquire a 0.6 mtpa Finex furnace from the latter. As part of its restructuring programme, the steelmaker is also looking at selling a stake in some of its assets.
Posco’s Finex technology doesn’t require coking coal, which India is forced to import, making it an attractive option being considered by several steelmakers in the country. The hitch is that the South Korean firm insists on retaining control over any partnership to safeguard the patented technology developed with government support.

Confirming the talks, Mesco’s Rita Singh told ET that negotiations were yet to be completed. Mesco Steel is looking to invest in further downstream capacity. The company, which turned itself around, now not only produces pig iron but also has iron ore mines in the state.

Mesco Steel’s operating Roida I mine has been shut for two months since the Supreme Court ordered that 26 mines could not carry on doing business without the state government giving an “expresss order” to renew them.

The BJD government has only agreed to renew seven captive leases of state steelmaker SAIL and Tata Steel, and one belonging to state-owned Orissa Mining Corp.

Meanwhile, the South Korean steelmaker’s Indian arm continues to wait for the government at the Centre to approve a prospecting lease recommended in its favour.

Posco had announced a Rs 51,000 crore mega steel plant nine years ago, but protests over land acquisition by locals, green activists, litigation and lack of approvals have stalled its plans.

State officials complain that Posco is yet to clear its dues to the agency acquiring land for it. While Odisha had recommended the Khandadhar iron ore deposit after four years of litigation, the Centre has still to approve it. Another worry for Posco is Union tribal affairs minister Jual Oram's announcement that he remains opposed to the mining project, which happens to be near his hometown.