Court order boosts POSCO mining plans

May 11, 2013 by  
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The company signed an agreement with Odisha in June 2005 to set up the steel plant on 4,004 acres of land.

POSCONew Delhi, May 10, 2013: South Korean steel major POSCO moved a step ahead in its mining plans in Odisha on Friday when Supreme Court set aside a State High court ruling against mining license and asked the government of India to decide on the issue.

The world’s fourth-largest steel producer has waited eight years to get necessary clearances, land and an iron ore mining license to start work on its $12 billion steel project the project, billed as India’s largest foreign direct investment.

“This is positive for the company because the central government has been supporting this project,” said Rakesh Arora, a metals expert and head of research at Macquarie Capital Securities (India) told Reuters. “There’s no doubt that without iron ore, this project was not starting at all.”

While the project planned in eastern Odisha may still face hurdles from protesters and over issues such as land ownership, a supportive federal government is expected to clear the path for POSCO’s top concern – a captive mine that will give it steelmaking raw material iron ore.

India was concerned about the delays and Prime Minister Manmohan Singh himself is monitoring the project’s progress, Trade Minister Anand Sharma had said in January.

In Friday’s order, Justice Sudhansu Jyoti Mukhopadhaya of India’s Supreme Court also quashed a lower court’s ruling that prohibited POSCO from mining iron ore.

“We believe that this will significantly help to expedite the project,” Y. W. Yoon, chairman and managing director of POSCO India, said in a statement. “We are happy that it has come at a time when there has been significant progress on the land clearance work for the project.”

The company signed an agreement with Odisha in June 2005 to set up the steel plant on 4,004 acres of land. It is seeking 2,700 acres to begin the project’s first stage, which involves setting up two 4-million-tonne plants in two phases.

So far the company has been able to get physical possession of just 1,700 acres.

The court order notwithstanding, the project could still face hurdles. A decision is unlikely to be made soon by the government, which is mired in various allegations of corruption in a pre-election year.

And POSCO is expected to face further protests from rights activists, environmentalists and former politicians.

“At no cost would POSCO be allowed to enter into the hills. We will not allow any mining,” said Jual Oram, a former federal tribal affairs minister from the Bharatiya Janata Party, the main opposition party in New Delhi. Oram has been leading the fight against the company’s mining plan.

– reuters

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