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Eastern India is shaping up as a new battleground for the global steel industry. Korean steel giant POSCO plans to build a steel plant in the region with an annual capacity of 12 million tons.
India's rapid economic growth is fueling strong local demand for steel and iron and the eastern region, with its reserves of 10 billion tons of iron-ore, seems to have the solution.
Arcelor Mittal, the world's biggest steel maker, has submitted a proposal to the Indian government to build a plant in the area. Nippon Steel Corp., the world's second-biggest steel company, and Baoshan Iron & Steel, the fifth biggest, are also rushing to enter the market.
POSCO is expected to have to compete fiercely with its global rivals to secure mining rights and market share.
Meanwhile, Indian and Chinese newspapers said on Tuesday that China's state-run steel firm Sinosteel Corp will sign a memorandum of understanding (MOU) next month with the government of the northeast state of Jharkhand.
This MOU will allow Sinosteel to build a steel plant with an annual capacity of five million tons. Jharkhand is located to the north of the state of Orissa where POSCO plans to build its plant.
After Orissa, Jharkhand has the country's second-largest iron-ore reserves with 3.6 billion tons. Sinosteel's Indian arm told the local press that Sinosteel will invest US$4 billion (US$1=W923) over six years to build the plant.
Shanghai Securities News reported that Sinosteel will team up with Baoshan Iron & Steel to construct the plant. The facility will serve as base camp for Chinese steel makers in India.
In 2005 Arcelo Mittal signed its own MOU with Jharkhand for a steel plant with an annual capacity of 12 million tons, and in 2006 offered a similar MOU to Orissa. Japan's Nippon Steel is in talks with India's Tata Steel on a joint venture to make steel sheets.
"India's steel demand which stood at 36 million tons last year, is forecasted to exceed 100 million tons in 2010," a POSCO executive said. "India has sizable iron-ore reserves and the market is expanding rapidly. That's a magnet for global steel makers to make inroads into India."
(englishnews@chosun.com )
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