Govt pushes Odisha to expedite grant of licence to Posco

Move aimed at placating the Koreans who are upset over SC's order asking Samsung Chairman Lee Kun-hee to appear before a Ghaziabad court

The ministry of external affairs (MEA) is pushing the Odisha government to expedite issuance of mining approval for South Korean steel major Posco. The move is aimed at placating the Koreans, upset over the Supreme Court order asking Samsung Chairman Lee Kun-hee to appear before a Ghaziabad trial court in a pending payment case.

Although the $12-billion steel plant project, languishing for over eight years, got approval for land a couple of months ago, the mining certificate for Posco to start captive iron-ore mining is still to be issued.

In a face-saving attempt, the MEA has urged the state government to send the required forms it needs to give to the mines ministry and obtain the mining certificate so that it can grant a licence to Posco, sources told Business Standard.

Apparently, the state government is causing the delay "intentionally", as it is awaiting implementation of Posco's commitment to build roads and a school in the area where the steel plant is coming up. However, sources said Posco will be able to do this only when it is equipped with the licence as that will help them obtain funds for the welfare schemes.

The steel giant has plans to set up a 12-million-tonne steel plant in Odisha's Jagatsinghpur district. This is the biggest foreign direct investment India has ever received. The proposal had been awaiting approvals since 2005, as it got entangled in several regulatory and environment-related hurdles.

Last month, the mines ministry informed an inter-ministerial group (IMG) which monitors the implementation of mega-steel projects in India that it was awaiting the state government's reply on the issue of grant of prospecting licence for the iron ore mine at Khandadhar.

This happened after the IMG induced the mines ministry to apprise it of the steps taken to expedite the smooth implementation of the project after the Supreme Court's May 2013 verdict for grant of a prospecting licence to Posco.

The apex court had set aside the Odisha high court order that quashed the state government's decision to allot an iron ore licence to Posco in the Khandadhar hills of Sundergarh district. It had asked the Centre to consider all the objections raised by various parties pertaining to the mega steel plant and take a decision.

It was then hoped the process to grant licence to Posco will be done promptly, leading to faster implementation of the project.