Mumbai: Asia’s third biggest steel maker, Posco, may be forced to buy iron ore to feed its $12 billion (Rs52,080 crore) steel plant in India should the government fail to award it a licence to mine ore.
“There is a possibility of iron ore requirement coming ahead of our captive mining operations,” S. K. Mahapatra, general manager at Posco India said on Tuesday. “In this situation, the state government has agreed to make the iron ore required available.”
Land disputes and delays in allocating mining licences have stopped South Korea-based Posco from proceeding with potentially the biggest overseas investment in India. The company is yet to begin building the 12 million tonnes (mt) steel plant in Orissa. Work was scheduled to start in April 2007.
“This decision to begin work as soon as they can and not wait for iron ore mines is a positive step since they are keen to set up this plant to tap India’s demand,” A.S. Firoz, an independent steel strategy analyst and former chief economist at the Union steel ministry, said.
Posco faces opposition in Orissa as locals and political parties want the plant to move to non-arable areas from farmlands.
Initially, the company will build a 4mt steel plant and set up a 400MW power plant.