Kobe Steel To Partner With India's SAIL, Eyeing Plant Deal -Nikkei
Kobe Steel To Partner With India's SAIL, Eyeing Plant Deal -Nikkei.
Staff Reporters
Dow Jones MetalSource Steel News
TOKYO (Nikkei)--Kobe Steel Ltd. (KBSTY) will form a joint venture with Steel Authority of India Ltd. to explore local production with the state-run giant, The Nikkei reported in its Wednesday morning edition. Plans call for building a plant in the state of West Bengal on the grounds of an electric furnace steel mill run by the Indian company, known as SAIL. The 50-50 joint venture, to be formed as soon as next month, will decide sometime next year on whether to go ahead with the project. The proposed plant would use a rotary furnace to turn low-grade iron ore and coal into iron nuggets of the same quality as pig iron from blast furnaces. And it would emit 15-20% less carbon dioxide than typical small blast furnaces in emerging economies like India. The iron nuggets would then go into SAIL's electric furnace, along with scrap iron and other materials, for production into construction-use steel. Some would also be shipped to Japan to feed Kobe Steel's own steel mills. SAIL's mines in the state of Jharkhand would supply the low-grade iron ore used to make the nuggets. This ore wouldn't otherwise be used for steelmaking. Blast furnaces are best for mass production but cost hundreds of billions of yen. Kobe Steel's technology cuts down on the initial investment. The company has a similar project going in Vietnam, with production there targeted to begin in 2014. SAIL produced 13.6 million tons of crude steel in 2010, ranking behind Tata Steel Ltd. as India's second-largest steelmaker by output, according to Metal Bulletin. India's total crude steel output reached 68.32 million tons last year, 150% more than in 2001. India has become the world's fourth-largest steel market, one that is likely to keep growing along with the nation's population and economy. Nippon Steel Corp. and JFE Holdings Inc.'s JFE Steel Corp. are also exploring building plants in India in partnership with local companies.
