SAIL, two cos sign deal for new steel plant

MUMBAI: Three Indian state firms, including Steel Authority of India, its No 1 steelmaker, have signed an accord to set up a 4 million tonne steel plant in eastern India, SAIL said in a statement on Friday.

SAIL said in April it was exploring an integrated plant in a joint venture with Rashtriya Ispat Nigam Ltd and National Mineral Development Corp. Friday's statement said the three companies would have equal equity participation in the joint venture proposed for the eastern state of Chhattisgarh.

The government said in May that SAIL would spend Rs 430 billion ($10.4 billion) to ramp up annual capacity to 25 million tonnes by 2010 from the current figure of about 14 million tonnes. Ahead of the announcement, shares in the company fell 4 per cent to Rs 137.45 in a Mumbai market that fell 1.5 per cent.

Demand for steel in Asia's third-largest economy is expected to remain firm as India builds more power plants, and improves its key transport infrastructure.

SAIL competes with domestic firms like Essar Steel and Tata Steel, which bought Anglo-Dutch Corus Group this year. Global majors like leader Arcelor Mittal and South Korea's POSCO are planning plants in the country.