Sinosteel, Handan may tie up for India venture

Sinosteel Corp, China's second- biggest iron ore trader, plans to tie up with Handan Iron & Steel Group for its proposed $4 billion venture in India.

"We are working out the shareholding pattern," Sino India's Managing Director Hong Sen Wang said in an interview on Wednesday. "Sino will hold a majority stake in the venture."

Sinosteel may buy iron ore locally for the 5 million ton plant until it secures a license to mine the steelmaking raw material from the government, Wang said.

Delays in allocating mining permits have held up $21 billion of projects by Arcelor Mittal and Posco, the world's biggest producers of the metal.

"We want to make it clear that we're not here only for the iron ore," Wang said. The company has been importing iron ore from India since at least 1991.

Handan Steel's vice president and secretary Li Buhai wasn't available for comment. The company's parent produces about 8 million tons of crude steel a year.

The plant will be based in the eastern state of Jharkhand and Sinosteel expects to decide on the location by August, Wang said. The company requires 3,000 acres of land for the plant.

The eastern states of Jharkhand, Orissa and Chhattisgarh account for 70 per cent of India's coal reserves and 55 percent of its iron ore, according to McKinsey & Co.