Sung Woo Park, Bloomberg
Seoul: Posco, the world’s fourth-biggest steelmaker, expects a $12 billion (Rs49,164 crore) project to build a steel plant in India will go ahead as planned as it obtains land for its largest overseas investment amid opposition by residents.
“We’ve secured most of the needed land,” Ko Min Jin, a spokeswoman at Posco said today by phone in Seoul. “Some residents are against the land purchases, but we continue to persuade them, and we expect the timetable for the project to go ahead intact.”
Arcelor Mittal, the world’s biggest steelmaker, and Posco have said they plan to spend $21 billion on plants in India, which has the world’s fifth-largest iron ore reserves. Posco’s proposed 12 million metric tons-a-year plant in Orissa, would be India’s largest foreign direct investment.
The company had planned to purchase land and start ground work this year, which Ko said was still expected to occur.
Shares in Posco gained 500 won, or 0.12%, to 423,000 won at 12:16 pm in Seoul.
Posco has estimated it needed 4,000 acres (1,619 hectares) for the venture. It won’t begin building until it has 3,000 acres, Jeong Tae Hyun, deputy managing director, said 12 February.
The company said 23 February it may acquire the land needed by October. Construction work on the project, talks for which began in August 2004, was earlier expected to begin last month.
The land facing opposition from residents takes up only a tenth of the total 4,000 acres needed, the Dong-A Ilbo newspaper reported 14 May, quoting an unidentified source at Posco.
Three officials at Posco’s India unit who visited Gobindapur village to negotiate land purchases with the farmers were released safely after being detained by activists opposing the venture in the eastern Orissa state, Posco’s Ko said on 12 May.
Four political parties in Orissa want the venture moved to barren areas instead of building it on farmland.
The land is mostly owned by Orissa’s government and has yet to be fully cleared of people. Supporters have said the project will bring jobs, while Abhay Sahu, president of the activist group that took the hostages, told Bloomberg yesterday it will displace as many as 22,000 people. About 15 people were injured in a clash at the Posco’s site on 7 March.
Posco’s Ko added Posco was considering hiring some residents for the venture in an effort to persuade opponents.