Steel Authority of India Ltd. called for an emergency board meeting to approve the long-delayed US$1 billion joint venture to make automotive-grade steel with ArcelorMittal, Reuters wrote Dec. 7, citing three sources familiar with the matter.
A senior government official said "the joint term-sheet has been prepared and it should hopefully reach its logical end soon," but did not give a date for the meeting. The other two sources, meanwhile, said the board will convene Dec. 12 after ArcelorMittal Chairman Lakshmi Mittal; Indian Steel Secretary Aruna Sharma; and Steel Authory of India Ltd., or SAIL, Chairman P.K. Singh reached a decision to approve the deal last week.
The companies signed the memorandum of understanding for the joint venture in 2015, but the transaction has been delayed due to clashes over terms of the agreement. According to the sources, the agreement was extended several times, with the last expiring Nov. 30. SAIL, ArcelorMittal and the steel ministry, however, did not immediately respond to Reuters' requests for comment.
In a separate news brief, Reuters wrote that Indian environmental authorities could cancel SAIL's plan to mine an iron ore reserve within the Saranda forest as the government is considering shutting down all mining activities in the area, which is home to endangered species of flying lizards and is also an integral part of an elephant corridor.
SAIL, according to the report, has been looking to mine in eastern India to supply a big portion of the raw material requirements for its targeted increase in steel production. It mines 800,000 tonnes per year from a part of the Chiria mine in the Jharkhand state and planned to raise iron ore output to 7 million tonnes in the next few years to meet its objective of producing 50 million tonnes of steel by 2030/31.
"Getting forest clearance for the mine under existing guidelines is a challenge," said Sunil Kumar Barnwal, mines secretary of Jharkhand state, according to the report.
A source told the newswire that Chiria has about 1 billion tonnes of proven reserves and SAIL's other mines have enough reserves to last up to eight more years.