The Korean company had also explored the possibility of collaboration with state-owned RINL and privately held Adani Group for setting up a steel plant.
South Korea's POSCO Group on Tuesday signed an agreement with Sajjan Jindal's JSW Group to set up an integrated steel plant in India with an initial capacity of 5 million tonnes per annum (MTPA), which, as per industry estimates may cost around Rs 40,000 crore.
A statement by the JSW group in this regard did not give details of either the investment or location of the proposed integrated steel plant. However, according to industry estimates, 1 MTPA greenfield steel project costs around Rs 8,000 crore.
"JSW Group (JSW) has signed a Memorandum of Understanding (MoU) with Korea’s POSCO Group (POSCO), outlining a framework for collaboration in steel, battery materials, and renewable energy sectors in India," the homegrown business house said in a statement.
The MoU was signed at JSW Group's corporate headquarters in Mumbai, in the presence of Jindal, POSCO Chairman Chang In-hwa, and senior executives from both the business houses.
For POSCO, it will fulfil its long-held ambition of having a large steel unit in India to cash in on growing demand in the country.
The Korean company had also explored the possibility of collaboration with state-owned RINL and privately held Adani Group for setting up a steel plant.
As part of the MoU, both JSW Group and POSCO will also explore collaborations in the areas of battery materials related to Electric Vehicles (EVs), and renewable energy for meeting the captive requirements of the proposed integrated steel plant.
"This MoU with POSCO marks a significant step forward in our journey to contribute to the Indian steel industry. As one of the world's fastest-growing economies, India presents tremendous opportunities for sustainable growth, and our partnership with POSCO strengthens JSW's commitment to drive that transformation.
"Together, we aim to set a benchmark in technology and sustainability that can shape the future of manufacturing in India and beyond," said Sajjan Jindal, Chairman of JSW Group, which has presence in sectors like steel, automobiles, infrastructure among others.
The partnership will focus on setting up an integrated steel plant in India with an initial capacity of 5 million tonnes per annum (MTPA).
"This collaboration will contribute significantly to the economic development of Korea and India and drive our joint efforts towards a more eco-friendly and sustainable future," Chang In-hwa, Chairman of POSCO said.
JSW's leading manufacturing presence and strong project execution capabilities, combined with POSCO's technological excellence, would create a strong platform for developing cutting edge solutions for the Indian steel and energy sectors," Chang In-hwa added.
POSCO has been trying to enter the Indian market for years. Its earlier attempts include setting up a 12 MTPA project at USD 12 billion investment in Odisha. However, the foreign player had to drop the plan due to inordinate delays in land acquisition.
Later the company engaged with state-owned Rashtriya Ispat Nigam Ltd (RINL) to take forward its greenfield steel plant project.
A joint working group was formed comprising RINL and POSCO officials to prepare a pre-feasibility report with respect to their plans to set up the mega steel facility in Andhra Pradesh.
Luck did not play for POSCO and RINL headed for disinvestment with a Cabinet's decision of 2021.
In January 2021, the Cabinet Committee on Economic Affairs (CCEA) gave its 'in-principle' approval for 100 per cent disinvestment of government stake in RINL, also called Visakhapatnam Steel Plant or Vizag Steel, along with RINL's stake in its subsidiaries/joint ventures through strategic disinvestment by way of privatisation.
Earlier in 2022, POSCO had signed an initial pact with Billionaire Gautam Adani led Adani Group and to explore business opportunities to invest about USD 5 billion on projects that include setting up an integrated steel mill in Gujarat.