In September this year, POSCO officials had a meeting with management of Rashtriya Ispat Nigam Ltd. (RINL), a public steel producer based in India, with regard to its plan to set up a joint venture (JV) steel plant in India.
It was the POSCO officials’ third visit to RINL this year, which suggests that the Korean steel giant is keenly interested in promoting its JV plans.
POSCO’s interest in the Indian steel market is not new. In 2005, it signed a memorandum of understanding with the Odisha government to build a US$12 billion steel plant at Jagatsinghpur in Odisha that can produce 12 million tons of steel per year.
But the plan was not realized due to various obstacles, including difficulties in land acquisition, delay in environmental clearances and protests by local residents. The MOU expired in 2010 and was not renewed again.
POSCO has recently renewed its bid to construct a steel plant in India, which is an attractive market with a prosperous economy, plenty of raw materials and favorable regulatory environment.
This time, POSCO is pushing for a JV with a local steel producer instead of building a steel mill on its own. It intends to join hands with RINL for manufacturing of value-added special grade of steel.
RINL, which is also known as Vizag Steel, operates an integrated steel plant that can produce 7.3 million tons of steel per year. The RINL plant in Visakhapatnam approximately covers an area of more than 22,000 acres, and POSCO envisions a JV steel plant set up on RINL’s premises.
Yet POSCO's plans are facing stiff opposition from RINL workers. According to media reports from India, all the trade unions of RINL called for a rally to register their protest against the proposed JV between RINL and POSCO.
The trade unions will stage a day-long dharna, a non-violent sit-in protest, on Dec. 13 at Amaravati, the new capital city of Andhra Pradesh, a state in southern India. The representatives from various political organizations have been invited for the protest, which coincides with the winter session of the State Legislative Assembly.
Steel Plant Employees’ Union president J. Ayodhyaram released a poster on Dec. 3 for the “Chalo Amaravati” program. “Efforts are being made to allot the surplus land of the RINL to POSCO on the pretext of the joint venture,” he was quoted as saying. “Instead of a joint venture with a foreign company, we are in favor of expanding capacity on our own by engaging a foreign collaborator.”
The trade unions are planning to mobilize around 3,000 employees for the Amaravati program.
In July this year, senior POSCO officials met Indian Steel Secretary Binoy Kumar and submitted an investment proposal. The Indian government has been seeking to attract foreign direct investment under the “Make in India” initiative, which was launched by Prime Minister Modi.