Mining lease no hurdle to Posco project

Gaining mining rights over the prized Khandadhar iron ore deposits is no bottleneck for the 12 million tonne steel project proposed by Posco India with the state government ready to furnish its compliance soon to the Centre.

"There is no issue with the mining lease and it should not be seen as any hurdle to the Posco project. We had already recommended the Khandadhar mining lease in favour of Posco India. Now, the Centre has asked us to submit two separate proposals, one for the notified area and other for the non-notified area of the lease. We are working on it and will send our compliance soon", said a top state official.

In March this year, the state government had recommended grant of PL over 2500 hectare (ha) area in Khandadhar mines in favour of Posco. Of the total area recommended, 650 ha belonged to non-notified areas, or the area which was not recognised by the state government as mineral bearing site.

Uncertainty in securing a mining lease and row over land acqusition had pushed the Posco project, the country's biggest FDI, to the brink of delay. The project cost was originally estimated at Rs 52,000 crore in June 2005 when the South Korean steel giant entered into a MoU (memorandum of understanding) with the Odisha government.

Notwithstanding the inordinate delay, Posco India today said it had no plans to pull out of the Odisha project unlike its bigger revival ArcelorMittal. In July last year, the world's biggest steel player, ArcelorMittal announced withdrawal from its proposed 12 million tonne steel mill in Odisha, citing resistance to land acqusition, delay in allocation of iron ore mines and law & order issues.

"We would not quit. No, never. We have been waiting (for the project) for 10 years", said Gee Woong Sung, chairman and managing director (CMD), Posco India after emerging out of a meeting with state chief secretary G C Pati.

"The discussion was successful", he said, refusing to disclose the details.

The Posco India CMD also met Vishal Dev, industries secretary cum CMD of Odisha Industrial Infrastructure Development Corporation (Idco). Dev could not be reached for comments on the matter.

Discussions on transfer of additional land to Posco India are likely to have surfaced at the meeting.

Idco has acquired 2,772.05 acres of land to facilitate establishment of an eight million tonne per annum (mtpa) steel mill by Posco India in the first phase.

This includes 2,193.52 acres de-reserved forest land and 578.53 acres government land. Out of this, 1703.56 acres have been handed over to the company.Idco is sore over non-deposit of Rs 54.22 crore by Posco India as government land cost for 2,193.52 acres. This has held up sanction of lease of additional 1,048.52 acres for the project. The 12 million tonne steel project needed 4,004 acres.