Jamshedpur: Korean steel giant Posco, which has announced plans of setting up a mega steel plant in Orissa, has expressed concern over the slow progress in obtaining prospecting licence for iron ore mining and acquisition of land leading to delay in start of the project.
The company has proposed setting up a 12-million-tonne integrated steel plant in the coastal state at a cost of Rs52,000 crore and signed a memorandum of understanding with the state in June 2005 in this connection.
Chango-ho Kwag, director of Posco Research Institute in New Delhi, told PTI on the sidelines of ‘Steelrise 2008’ here that securing prospecting licence and land acquisition were the two major issues that were worrying the Posco officials in Korea.
Kwag, who is closely associated with the Posco project in Orissa, said although the company had applied for prospecting licence for iron ore mining in November 2005, there was not much progress in this regard.
The application which was sent to the Orissa government for onward passage to the Union Ministry of Mines, was sent back as the state had skipped the procedure of public hearing. “Now the public hearing is taking place,” Kwag said.
This had led to considerable delay in the start of the project, he reasoned.
The other factor worrying Posco was land acquisition. The project required nearly 4,000 acres of land, but the company has been able to get only 300 acres. Out of the total land requirement, 90% belonged to the state government and the rest was to be purchased from the people.
Kwag said that the company was willing to pay compensation to those who had encroached on government land. “We are hoping to resolve the issue in a couple of months,” he said.
He said that Posco was committed to the project as of now, and is also pursuing similar projects in other countries as well. “Posco has sufficient human and financial resources to undertake such mega projects,” Kwag said.
He, however, said that pursuing mega projects in India was time consuming as compared to Korea.
The delay had also led to cost overrun, he said.
Kwag also stated that Posco Korea was now thinking whether the project in India was possible.
As per the new plans, the company intends to start initial phase of steel manufacturing by 2012, as against early 2011.
Posco Research Institute is an economic think tank promoted by the company.