Mumbai: The government will speed up the process of granting Posco an iron ore mining licence, seeking to end a four-year wait by the steel maker to secure resources for its planned $12 billion (Rs58,680 crore) venture in the country.
“We are looking into the matter and will get this done as soon as possible,” steel minister Virbhadra Singh said on Wednesday in New Delhi, while attending an industry conference. “We are working with the state government to expedite the matter.”
Land disputes and the delay in getting a mining licence prevented South Korea-based Posco from proceeding with one of India’s biggest foreign investments. Asia’s fifth biggest steel maker has yet to start building the 12 million tonnes (mt) plant in Orissa. Work on the project, announced in June 2005, was scheduled to start in April 2007.
“We are hoping something good will happen,” Posco India spokesman Saroj Mahapatra said by telephone on Wednesday.
Jharkhand, Orissa and Chhattisgarh account for 70% of India’s coal reserves and 55% of its iron ore, according to McKinsey and Co.
Posco faced opposition in Orissa as locals and political parties want the plant to be moved to non-arable areas from farmlands.
Prime Minister Manmohan Singh in July last year told South Korean President Lee Myung Bak at a summit in Japan that he would help Posco start construction work on the plant in August, according to a statement posted on the website of South Korea’s presidential office.
Initially, Posco will build a 4mt plant and set up a 400MW power plant. The company has sought 600mt of iron ore for the steel mill. Posco joins ArcelorMittal in seeking to expand in Asia, where steel demand is growing faster than in Europe and the US.
In October 2005, ArcelorMittal said it would set up a factory with a final capacity of 12mt in Jharkhand and announced another plant of the same size in neighbouring Orissa the following year.