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By Jason Simpkins
Korea's Posco Ltd., Asia's third-largest steelmaker, has landed a $350 million contract to build the biggest blast furnace in India, Bloomberg News said Wednesday.
The furnace, a key part of the steel-making process, is for the Steel Authority of India Ltd., which is 85.84% state owned. It makes 14 million tons of steel a year – close to a third of India's total output. The project opens up major opportunities for Posco, as India's steel business is projected to rise at a rate of 16% each year from now until 2012.
The furnace will be 4,060 million cubic meters and have a produce of 2.7 metric tons of steel a year. It is scheduled for completion by March 2010. So far, construction has been delayed, as the land has not been fully cleared of occupants and Posco has yet to obtain a mining license.
On Wednesday, Hyundai Samho Heavy Industries Co. bought an additional 436,000 shares in Posco for $266.8 million. The transaction raised Hyundai Samho's holding in Posco to 1.5% (1.3 million shares) of the steel maker's total float, Hyundai Samho said in a regulatory filing. Posco has swapped stakes with several friendly investors, including Hyundai Heavy and Japan's Nippon Steel Corp, to ward off any hostile takeover bids.