New Delhi: State-run SAIL will ink the final pact with Japan's Kobe Steel next week to set up a 0.5 million tonne (MT) capacity specialised steel plant at Durgapur, West Bengal, entailing an investment of Rs 1,500 crore.

"India’s largest steel producer Maharatna Steel Authority of India Limited (SAIL) and Kobe Steel of Japan will sign a MoA on July 10 in Japan", a Steel Ministry statement said on Friday.

This would pave the way for setting up a 0.5 MTPA iron nugget plant in Durgapur, using Kobe’s patented ITmK3 technology, it said.

The Memorandum of Agreement (MoA) will be signed in presence of Steel Minister Beni Prasad Verma who is heading a delegation to Japan this week.

A joint venture company "SAIL-Kobe Iron India Pvt Ltd" in which SAIL and Kobe Steel hold equal equity, has already been incorporated, while the investment required in the venture is Rs 1,500 crore.

The raw material for the joint venture would be supplied from SAIL's Gua mines in Jharkhand.

"For production of 0.5 MT of iron nuggets, the plant to be set up at SAIL’s Alloy Steel Plant in Durgapur will require around 0.8 MT of iron ore fines per annum which will be supplied from Gua Iron Ore Mines of SAIL," the statement said.

Output from the proposed plant will be shared between SAIL and Kobe Steel for captive use in their own plants/joint ventures, it added.

SAIL and Kobe Steel had earlier signed a pact on March 30, 2010 for conducting a joint feasibility study for exploring and commercialization of ITmk3 technology developed by Kobe for production of iron nuggets used for steel production.

ITMk3 stands for "iron making technology mark three". This is a proprietary technology of Kobe for producing a premium quality pig iron (nuggets).

One of the features of ITmk3 process, the statement said, is that it can produce iron nuggets by utilizing relatively low-grade iron ore fines and non-coking coal as major raw materials and does not require either iron ore lump or blast furnace coke/coking-coal.

Also, ITmK3 does not require coke oven plant or sinter plant for producing iron nuggets. CO2 emission is also less as compared to production through the blast furnace route, making the technology very environment-friendly.

"Setting up of the ITmK3 plant will show-case cooperation between India and Japan. The visiting Indian team will also look at other areas of cooperation for which a meeting has been scheduled with Japan’s Ministry of Economy, Trade & Investment," the statement added.


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