Posco to maintain steely resolve, says Indian envoy

Posco, the world’s fourth-largest steel maker, remains committed to India, according to India’s Ambassador to South Korea S R Tayal. According to him, the South Korean company, whose $12-billion project to set up a steel plant in Orissa has been languishing for half a decade, has no intention of pulling out as there is immense understanding of the situation in the company as well as the South Korean government.

“There is no signal from the South Korean government that there is any effort to drop the Posco project. There is a common desire on both sides to see the project through. Every effort is being made by all stakeholders,” Tayal said.

Posco signed a Memorandum of Understanding with the government of Orissa in June 2005 to set up a 12-million-tonnes-a-year green field plant near Paradip at Jagatsinghpur district. The project is still stuck in the starting blocks as it has been grappling with problems in acquiring land and obtaining environment clearances.

However, a person familiar with the parlays said Posco might consider moving its project out of Orissa, possibly to Karnataka. It seems a committee of the Karnataka government has been in touch with Posco and South Korea, offering easy-to-acquire stretches of land and mining linkages.

ArcelorMittal, which had announced its own mega steel project in Jharkhand and Orissa, recently announced that it was moving ahead with a plant in Karnataka.

South Korean President Lee Myung-bak, who is the host of the G20 Summit, was expected to raise Posco’s travails with Prime Minister Manmohan Singh in Seoul. However, the ambassador said the subject was not on the table of discussions between the two leaders.