SAIL and Posco may each take an equal stake in their proposed joint venture at Bokaro. The investment in the project is estimated at around Rs 17,000 crore.
The joint venture agreement between the two steel firms is likely to be signed next week during the Steel Minister, Mr Beni Prasad Verma's visit to South Korea.
“We may have 51 per cent equity or it could be 50:50 joint venture,” Mr Verma said. Two units of 1.5 million tonne each are proposed to be set up in Bokaro to produce auto grade steel using Posco's patented Finex technology.
The Finex technology makes use of iron ore fines thereby eliminating the need to use coking coal in the steel making process.
SAIL is keen on having a majority stake of 51 per cent in the proposed joint venture to retain the public sector characteristic.
However, Posco, which is taking its Finex Technology outside Korea for the first time wants a majority stake in the proposed joint venture besides retaining the operational control of the venture, sources said.
Besides, the pricing issue of iron ore that SAIL would supply from its captive mines to the proposed joint venture is yet to be resolved. A clearer picture on the shareholding pattern of the proposed joint venture and iron ore pricing is likely to emerge in a day or two, sources said.
SAIL shares gained 1.62 per cent to close at Rs 112.65 on the BSE. SAIL will announce its September quarter results on Thursday.