Korean steel giant Posco Group said Monday it has agreed with India’s JSW Group on detailed terms to build its first integrated steel mill in India, marking a major step toward its long-awaited entry into the local steel industry.
According to Posco, the two companies recently signed a non-binding heads of agreement to establish a 50:50 joint venture in Odisha state, eastern India.
The new agreement builds on the partnership signed in October 2024, which aimed to create a steel mill with an annual capacity of 5 million tons and capable of carrying out the full steelmaking process, from smelting iron ore in furnaces to producing pig iron and rolling finished steel products, by 2031.
Under the updated agreement, the partners have agreed to increase the planned capacity to 6 million tons and finalized the region for the facility. They also settled on the financial ownership structure of the joint venture.
While Posco said the process of selecting the optimal site is nearing completion, Indian media reported earlier this month that land acquisition has already begun for the new facility in the town of Keonjhar.
“India has been a core growth pillar in the global steel market. The time-honored partnership built on trust between Posco Group and JSW Group has led to the establishment of this integrated steel factory in India,” said Posco Holdings representative Director and President Lee Ju-tae.
“We will make every effort to ensure that the collaboration between leading players in Korea and India’s steel industry generates future value and contributes to the growth of both companies.”
Since 2005, Posco has pursued entry into India’s steelmaking industry, anticipating the country’s growth into one of the world’s top steel markets, supported by its large population and potential to become a manufacturing hub following China.
However, Posco’s earlier four attempts to build a fully controlled or joint venture mill were hindered by local disputes and partner-related challenges, underscoring the difficulty of establishing operations in India.
Now, Posco is betting on a close partnership with India’s leading steelmaker, collaborating across a wide range of areas, including their core steelmaking business and future industries such as battery materials and renewable energy, where Posco has established expertise.
The two companies are also jointly bidding to acquire the Whyalla Steelworks in Australia, forming a consortium with Japanese and Australian steelmakers.
“JSW's leading manufacturing presence and strong project execution capabilities, combined with Posco's technological excellence, would create a strong platform for developing cutting-edge solutions for the Indian steel and energy sectors,” the Indian company said.
Posco says the new facility will give it a competitive edge in the Indian market, with low manufacturing costs due to its proximity to iron ore and coal sources.
The company added that securing a foothold in India has been an urgent priority, as steel consumption has surged 9-10 percent annually over the past three years, supported by government efforts to promote steel-using industries such as shipbuilding and electric vehicle manufacturing.
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