Months after the Cabinet Committee on Economic Affairs (CCEA) gave in-principle endorsement for 100 percent divestment of Centre's stake in Rashtriya Ispat Nigam Limited (RINL), the move has prompted South Korean steel major Posco to discover new locations for establishing a steel plant.
"Posco has been exploring investment in India like other global steelmakers ArcelorMittal, but it has not made any progress," said by a source.
Reports arrived that YS Jagan Mohan Reddy government in Andhra Pradesh had invited Posco
to establish a plant in Krishnapatnam, though, the steel major is yet to take a decision.
Cabinet gives in-principle approval for 100% divestment in RINL
Vizag-based steel plant RINL has been reeling under losses over the past few years. It reported a decline of Rs 1,369 crore in 2017-18 and Rs 3,910-crore loss in 2019-20.
Pocso had affirmed a memorandum of understanding (MoU) to establish a 12 million tonne plant in Jagatsinghpur district in Odisha, but it has been 16 years that it has been trying to set up a steel plant in India. Change in mining policy and land acquisition issues have disrupted its plans.
Earlier in February, Reddy had written to Prime Minister Narendra Modi to review the disinvestment plans of RINL Vishakhapatnam. Now with Centre's plan in place, Posco's plan may be delayed more as it may have to relook for a different location.
Similar issues rose up with ArcelorMittal, which signed a MoUs for setting up mega steel plants in Jharkhand and Odisha in 2005 and 2006. It later entered India in December 2019 after getting hold of Essar Steel under the insolvency law.
