Adani, Posco tie-up for steel mill in Gujarat
NEW DELHI: Billionaire Gautam Adani’s group and South Korea’s Posco have signed an initial pact to explore business opportunities to invest about $5 billion on projects that include setting up an integrated steel mill in Gujarat, the two firms said on Thursday.
The non-binding pact, if it fructifies, will give infrastructure conglomerate Adani Group, which has in the recent months announced plans to foray into areas as vast as petrochemicals and hydrogen generation, an entry into steel manufacturing.
For Posco, it will fulfil its longheld ambition of having a large steel unit in India to cash in on growing demand in the country.
South Korea’s largest steel-maker had a few years ago dropped plans for a $12 billion steel plant project with an annual capacity of 12 million tonnes in Odisha due to inordinate delays in land acquisition.
In a joint statement, Adani Group and Posco said they have “agreed to explore business cooperation opportunities, including the establishment of green, environment-friendly integrated steel mill at Mundra, Gujarat, as well as other businesses. The investment is estimated to be up to $5 billion.”
The memorandum of understanding (MoU) also provides for collaboration in various industries such as renewable energy, hydrogen and logistics in response to carbon reduction requirements, it said.
The statement did not give details of individual investments or elaborate on the partnership.
Posco has a 1.8 million tonnes cold-rolled and galvanised mill in Maharashtra that supplies automotive steel to the country’s leading automakers.
Adani Group, which started as a commodity trading firm in 1988 before foraying into seaports, power generation and distribution, renewable energy, coal and city gas retailing, has seen rapid diversification in recent years. It has ventured into managing airports and now runs data centres and digital services.
The group run by Adani, who is Asia’s second-richest person, has also announced plans to manufacture solar modules, batteries, electrolysers, and wind turbines, and is looking at opportunities to retail petrol and diesel and set up a petrochemical plant. It has also been focusing recently on expansion into metals.