NEW DELHI (AFP) - South Korean steel giant POSCO is to invest 8.4 billion dollars in setting up a steel plant in India with annual output capacity of 10 million tonnes, Seoul's commerce minister said here.
According to a Confederation of Indian Industry statement, South Korean Commerce Minister Lee Hee-Beom said Seoul was impressed with India's economic resurgence and that POSCO "will set up a steel plant capable of producing 10 million tonnes annually."
Lee had noted that the project would require an investment of 8.4 billion dollars over the next 15 years, according to the statement, issued during the three-day visit to India of South Korean President Roh Moo-Hyun and a high-powered delegation due to end later Wednesday.
The investment proposal is the biggest ever by a foreign company in India and the plant is expected to be set up in the oil and mineral-rich eastern state of Orissa.
"The project will have a capacity of three million tonnes in the first phase and operations will start by 2009," POSCO president Kang Chang-Oh told a business meeting earlier, according to the Press Trust of India news agency.
POSCO also proposes to develop iron ore mines with annual production capacity of 30 million tonnes, Kang said.
The company has been sourcing iron ore from India and last year bought two million tonnes.
However, an Economic Times report said that the South Korean steel giant may opt for Brazil instead of India in making the investments and is in negotiations with Brazilian mining company Cia Vale do Rio Doce (CVRD).
Last month, POSCO said in a statement it had signed a preliminary agreement with the Brazilian mining group to launch a joint study into the commercial viability of a steel mill.
POSCO is the world's fifth-largest steelmaker.