JSW Steel board approves a 50:50 joint venture with South Korea’s Posco to set up a 6 MTPA steel plant in Odisha. Explore the ₹508.8 Cr deal and project details
OdishaPlus Bureau
The board of JSW Steel Ltd has sanctioned a joint venture with South Korea’s Posco Group to establish a 6 million tonnes per annum (mtpa) integrated steel plant in Odisha.
The collaboration will be carried out through Saffron Resources Pvt. Ltd., a wholly owned subsidiary of JSW Steel, which will transition into a 50:50 joint venture between the two firms, as stated by JSW in a regulatory filing on Friday.
The planned facility will be a Greenfield project, representing a substantial expansion of JSW Steel’s domestic manufacturing presence.
Under the terms of the agreement, Posco will acquire shares in Saffron Resources for an estimated ₹508.8 crore, subject to closing adjustments. The completion of the transaction is anticipated by 31 December 2026, unless extended by mutual agreement.
Saffron Resources currently possesses approximately 887 acres of land in Odisha, comprising both freehold and leasehold parcels, which may be utilized for the plant’s development.
The finalization of the joint venture occurred nearly 18 months after JSW and Posco initially signed an agreement in October 2024 to collaborate on steelmaking, electric vehicle (EV) batteries, and renewable energy initiatives.
“Partnering with POSCO Co., Ltd will allow the Company to establish a strategic alliance for access to technology and the production of high-grade steel products for automotive and other uses,” the steelmaker stated in an exchange filing on Friday.
This will represent JSW Steel’s third joint venture with a foreign entity, complementing its existing two partnerships with Japan’s JFE Steel Corp.
JSW Steel, which currently has a crude steel capacity of 35.7 MTPA globally, aims to achieve a capacity of 50 MTPA in India by FY31. Posco, with approximately 45 MTPA capacity, is expected to contribute advanced technology and operational expertise to the joint venture.
The partnership also indicates a renewed commitment by Posco in India following previous challenges.
In 2005, Posco announced its intention to invest $12 billion in a 12 mtpa steel manufacturing facility in Odisha, even establishing an office at The Ashok Hotel, which is in proximity to the Prime Minister’s residence, indicating its desire to maintain close relations with policymakers.
In 2010, the firm revealed an additional investment of $5.3 billion for a 6 mtpa plant in Karnataka.
However, despite its prominent initiatives, the projects did not materialize. Posco withdrew from Karnataka in 2013 and abandoned the Odisha project in 2017. These withdrawals were primarily due to challenges in securing iron ore linkages and land acquisition amidst regulatory obstacles. Furthermore, the Odisha project encountered ongoing opposition from local communities in Jagatsinghpur district, where residents resisted the diversion of forest land that they had depended on for generations, as reported by the media.
