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SAIL, Kobe Steel to form JV for ITmk3® project study

December 28, 2011

TOKYO, December 28, 2011 - Steel Authority of India Limited (SAIL) and Kobe Steel, Ltd. of Japan have agreed to establish a joint venture company to carry out a detailed feasibility study for a commercial ITmk3 ironmaking plant in India. Provisionally called SAIL-KOBE Iron India Private Limited, the proposed 50-50 joint venture will be headquartered in New Delhi.

"It is my earnest wish that our new iron making technology - ITmk3 - will contribute, through this joint venture project with SAIL, to further development of Indian Steel industry as well as of India itself. Further, I do hope this ITmk3 JV Project will become a golden opportunity for the both companies to explore other fields where we can collaborate for mutual benefits" said President Kobe Steel Ltd. Mr. Sato.

"The joint venture will bring about an era of path-breaking technological collaboration between the two advanced and modern companies, heralding a new dawn for the Indian steel industry," said SAIL Chairman Mr C.S. Verma.

The two companies have so far been jointly working on a preliminary study to utilize the ITmk3 process developed solely by Kobe Steel since signing a memorandum of understanding in March 2010. Kobe Steel and SAIL will now carry out the detailed feasibility study to bring about the early implementation of the project.

The project consists of one ITmK3 ironmaking plant and associated facilities. With a capacity to produce 500,000 metric tonnes of iron nuggets per year, the plant would be constructed at SAIL's Alloy Steels Plant in Durgapur in West Bengal. The project would use iron ore from SAIL's mines. Non-coking coal, sourced within India, will be used as the reductant in the ITmk3 Process.

After the detailed feasibility study is completed with the environmental permits having been obtained, plant construction would commence in 2013 at the earliest and the plant would go into operation in 2015.

ITmk3 technology is the latest generation iron making technology where iron nuggets are produced by using iron ore fines and non coking coal. Conventional BF route requires iron ore lumps, sinter and coking coal to produce pig iron. ITmk3 technology produces high quality iron nuggets and the technology is also environmental friendly.

Kobe Steel and SAIL will have the right to utilize the iron nuggets produced at the Durgapur plant in proportion to their equity share in the joint venture for their own use, or the joint venture may sell the nuggets directly to the market.

Through the ITmk3 project, Kobe Steel and SAIL will be able to contribute to the further development of India's steel market.