December 02, 2008

POSCO project expected to get nod from Orissa government

ET reported that South Korean steel giant POSCO USD 12 billion projects in India may finally get going with the government expected to give nod to its proposal for iron ore mining lease and forest diversion clearance plan almost simultaneously next month.

The report cited an official source as saying that “The government is according utmost priority to the POSCO project. In this regard its proposal for prospecting license for Khandhadhar iron ore block in Orissa would be given as soon as the state sends its recommendations to the Centre. The Supreme Court’s Central Empowered Committee on environment has also said that it would recommend for land diversion clearance once there is clarity on mining lease for the project.”

POSCO project requires captive iron ore mines with reserves of about 600 million tonnes. While the state has identified three blocks at Khandhadhar, Melang Toli and Thakurani for the project only Khandhadhar is close to be being offered to the steel maker. The state is conducting a public hearing from other applicants for the same block and expects to conclude the process by July 26, before finalizing the name of POSCO as the most deserving applicant for the iron ore block with a firm investment commitment and project development plan. Though the mining block has a reserve of about 200 million tonnes of iron ore, sufficient to meet just one third of POSCO total requirement, it could support entire first phase of the steel project.

On the forest diversion plan clearance, the matter has reached the final stages as both state and the Centre have cleared the application and CEC is waiting for clearance of mining rights before recommending PL for Khandhadhar in favor of POSCO. The company has submitted its application of forest diversion plan for changing the land use of 3,093 acre of forest land on its project site of 4,004 acres. This clearance would mean that POSCO would be in possession of over 3,500 acre of government land soon. It would then begin the process to acquire the remaining about 450 acre of private land.

The project has been awaiting formal clearances for almost three years now. Grant of the two clearances would be major step forward in salvaging the steel major’s 12 million tonne steel project that has been in the midst of controversy ever since an MoU was inked in 2005. The company hopes to begin work on the first phase of 4 million tonnes capacity immediately after getting land and mining clearance and targets to complete it ahead of original schedule of 36 months.

POSCO spokesperson said “We could begin work on the project even if we get a portion of the total project land. Anticipating final lot clearances for the project soon, the company has already finalized a rehabilitation and resettlement plan that has even bettered the one finalized by the state government.”