SAIL inks pact with Afripalm for $ 2.94 bn plant in SA: Report

JOHANNESBURG: State-run SAIL has signed an agreement with Afripalm Resources to set up a steel plant in South Africa at an investment of $ 2.94 bn, media reported here.

"Lazarus Zim's Afripalm Resources has signed a memorandum of understanding with SAIL to build a 21 bn rand ($ 2.94 bn), steel mill in SA," leading daily Business Day said.

When contacted a spokesperson of Steel Authority of India (SAIL) said, "We don't have any comment to offer".

Quoting Zim, Chairman of Afriplam, the daily said Afriplam's subsidiary, Afripalm Horizons, was working with SAIL to identify a site for the mill that would either be based near the coast to facilitate exports or near iron-ore producing areas.

"A six-month bankable feasibility study will be undertaken on the project, which aims to produce 3-5 million tonnes of steel a year," Zim was quoted as saying in the newspaper.

SAIL Chairman C S Verma earlier this week had said that it intended to set up four 3 mtpa steel manufacturing facilities -- one each in Indonesia, Mongolia, South Africa and Oman -- at a cumulative investment of $ 12 bn.

"We have already signed the Memorandum of Understanding with the Indonesian government and are in constant dialogue with the governments in Mongolia, South Africa and Oman for setting up the 3 MTPA steel plant," Verma had said.

The proposed plants would cater to the local need, he had said, adding that the company would aim to finalise all the plants in 2011-12.

The South African market is being served by the world's largest steel maker ArcellorMittal.