The Steel Authority of India Limited (SAIL) is carrying out discussions with POSCO steel to increase co-operation between the two steel makers, according to S K Roongta, SAIL chairman.

It was not disclosed if the steelmakers were mooting a jointly operated plant in India. A media report has earlier indicated that POSCO was in talks with SAIL to jointly set up a steel plant on a piece of land already owned by SAIL in eastern part of the country. The project is said to be worth Rs 100 billion.

"I can't say anything at this stage about a joint plant. But the two companies have Memorandums of Understandings since 2007, so the joint groups must be discussing what areas we can increase co-operation," said Mr. Roongta in an interview on Thursday.

In another development, SAIL has said that it plans to increase its capacity from current 13 MT to 60 MT in 2020 through various Brownfield and Greenfield projects.

According to Mr. Roongta the company will have a capacity of 23.7 MT by 2012 which will be raised to 60 MT crude steel capacities by 2020. He also expressed concerns on the issues relating to iron ore which is the raw material for the steel industry. The company’s iron ore resources are said to have high level of alumina which affects steel production.