Posted on 26 Aug 2025
Last week's signing of a Non-binding Heads of Agreement (HOA) between South Korea's POSCO Group and JSW Group, India's largest privately-owned steel company, adds fresh momentum to their plans announced last October for a joint venture integrated steel works in India.
The agreement confirmed that each will own 50% of the venture, as indicated last October, but the proposed plant's initial crude steel production capacity has been lifted to 6 million tonnes/year, from 5 million t/y as was first announced.
"As part of the next steps, POSCO and JSW will undertake a detailed feasibility study to finalize the plant's location, investment terms, resource availability, and other critical factors," they said in a statement issued following the HOA signing in Mumbai on August 18. Though not legally binding, the HOA mandates exclusive negotiation rights and formalizes business confidentiality.
On October 21 last year, the two companies had inked a Memorandum of Understanding (MoU) for cooperation in steel, rechargeable battery materials, and renewable energy, as Mysteel Global reported.
No timeline has been given for the expected construction and commissioning of the new works, however, or the technology the plant will use and the steel items it will produce. Also, while local and Korean media reported that Odisha State in eastern India had been formally chosen to host the plant, in last week's statement the two merely stated that "Odisha is among the key locations being considered, given its natural resource base and logistical advantages."
The POSCO Group has long targeted the Indian market, having tried unsuccessfully from 2005 to build its own integrated steel plant in Odisha before finally abandoning the plan in 2017 after repeated setbacks, mainly relating to land acquisition, as reported.
The Korean steelmaker already operates a 1.8 million t/y cold rolling and galvanizing plant in Maharashtra State, commissioned in June 2014, and has steel processing plants in New Delhi, Gujarat, Tamil Nadu, and Andhra Pradesh. Once completed, though, the new steel works will not only be POSCO's largest plant in India but also its largest overseas steel mill, according to Korean commentators.
Progressing its India venture follows a recent pattern for POSCO. "Since the inauguration of Jang In-hwa as POSCO Group chairman last year, POSCO has been implementing strategic investments both domestically and internationally to rebuild its steel competitiveness," BusinessKorea magazine observed. "Overseas, POSCO is pursuing an expansion of upstream-focused investments and a complete localization strategy to preempt high-growth and high-profit markets such as India and North America," it noted.
In April this year for example, POSCO signed an MOU with counterpart Korean integrated steelmaker Hyundai Steel to "collaborate" in Hyundai's plans to build an electric arc furnace-based steel mill in Louisiana, U.S.A. "The cooperation will allow POSCO to secure a bridgehead for its entry into the North American steel market," as reported. The two Korean makers hope their planned 2.7 million t/y EAF works will commence production in 2029.
More recently in early August, POSCO was named in an international consortium of steelmakers formed under Australian coated products maker BlueScope Steel bidding to acquire the financially-strapped Whyalla steel works in South Australia. Besides BlueScope (the former BHP Steel) and POSCO, the consortium includes Japan's Nippon Steel and India's JSW Steel, as reported.
"Despite difficult internal and external business environments, we will turn crisis into opportunity by strengthening the fundamental competitiveness of our core businesses," BusinessKorea quotes a POSCO official as saying about its strategy.
Will HyREX debut?
As POSCO and JSW now begin a detailed feasibility study into their JV steel project, a priority focus will need to be the technology their steel works will employ. While both makers have experience in conventional steelmaking using the blast furnace-basic oxygen converter combination, the chances are high that they will opt for state-of-art processes that promise a smaller carbon footprint, given each company's avowed commitment to 'green' steel.
Two weeks ago, for example, news broke that BHP is leading a global consortium of steelmakers and other firms exploring the development of carbon capture, utilization and storage hubs across Asia, as Mysteel Global reported. JSW Steel is a consortium member, along with Hyundai Steel.
It's significant too that Hyundai Steel's Louisiana steel mill project that POSCO has signed to join [see above] is to be an EAF-based works.
A pointer to the technology POSCO and JSW might opt for lies in a May 2023 meeting in Mumbai between POSCO's then chairman Choi Jeong-woo and JSW Steel's chairman, Sajjan Jindal. The two discussed comprehensive cooperation in future growth projects, including carbon neutrality, hydrogen steelmaking and second battery materials, Korea's Hankook Ilbo newspaper had reported at the time.
More crucially, "POSCO is considering India, which is known as an optimal place for renewable energy and green hydrogen production, as a candidate for hot briquette iron production for hydrogen reduction steel," the daily had said. "JSW Steel is also much interested in HyREX, POSCO's unique hydrogen reduction steel technology," it added.
POSCO's HyREX (Hydrogen Reduction) process heats iron ore (iron oxide) in a reduction furnace using hot hydrogen gas which removes the oxygen from the ore, as Mysteel Global has reported. The result is direct reduced iron which can then be introduced to an electric arc furnace to leave highly pure molten iron.
In BF-BOF steelmaking, fossil fuels such as coal and natural gas react chemically with iron ore and in the process, produce carbon dioxide. By substituting heated hydrogen gas as the iron oxide reduction agent, the only byproduct is water.
POSCO hopes to have a 1 million t/y HyREX test facility in operation at its Pohang works in south-east Korea by 2028. It shouldn't surprising if the first commercial scale HyREX plant is at the POSCO-JSW joint venture works in India.
Hinnamnor help
Choi's May 2023 visit to JSW India was also a mission of thanks to the Indian maker for its help in POSCO's time of crisis.
Nine months earlier in September 2022, much of POSCO's Pohang works was submerged after Super-Typhoon Hinnamnor had made landfall near the city, causing massive flooding and forcing the company to halt all operations at the works for the first time in its 49-year history, as reported.
Among the works' crucial items of equipment severely damaged was the No.2 hot strip mill, the largest of three rolling facilities there and which processes about one-third of all steel produced at Pohang plant. The flooding damaged 11 of the No.2 HSM's 15 motor drives beyond repair necessitating each to be replaced – a task that would have delayed the full restart at Pohang by more than a year, according to POSCO.
POSCO's Choi and JSW's Sajjan Jindal had become close when Choi had succeeded Jindal as World Steel Association chairman that same year, 2022, and once the extent of the damage to the Pohang works was known, Choi had reached out to Jindal for help. Jindal quickly offered to surrender the motor drives that were being prepared for installation in JSW's own hot strip facilities.
Then POSCO Group Chairman Choi Jeong-woo (right) presents an appreciation plaque to JSW Steel Chairman Sajjan Jindal in May 2023
"At the time of the restoration work for our steel mill hit by Typhoon Hinnamnor, Chairman Jindal gave POSCO the facilities that were being manufactured for the JSW hot-rolled products plant, which helped us greatly," Choi said. By early February 2023, POSCO had completed the restoration of all 17 rolling mills at its Pohang Works – including the No.2 HSM – and commenced normal operations at all its facilities from February 20, as reported. |
Source:Mysteel Global
