Odisha clears report on Posco's mining permit

Stage set for Centre to issue prospecting licence

Odisha Chief Minister Naveen Patnaik on Friday gave his nod to the compliance report on the Khandadhar iron ore mines, earmarked for Posco's Rs 54,000-crore steel project in the state.

This paves the way for the report being sent to the Union mines ministry, which would then decide on granting a prospecting licence (PL) to the South Korean steel major for the proposed plant, near Paradeep.

The report contains the findings of the differential global positioning system survey of around 2,500 hectares of the lease area. "The state government has done a mapping of the lease area, which will be sent (to the Centre)," said Mines Director Deepak Mohanty.

The state government had recommended a PL in Posco India's favour in January 2009, according to Section 11 (5) of the Mining and Minerals (Regulation and Development) Act. But the high court (HC) quashed the recommendation and asked the state government to conduct a fresh hearing of all the 226 applicants for the mines. The Korean giant got a breather in May 2013 when the Supreme Court set aside the HC order.

Now, revalidation of the lapsed environment clearance has rekindled hopes for Posco. Though the state government had completed acquisition of 2,700 acres for an eight-million-tonne plant in the first phase, the steel major could not start construction due to lack of environment clearance revalidation. The revalidation, for a four-million-tonne steel project and 400-Mw captive power plant, is for five years from July 18, 2012.

The environment & forests ministry had advised Posco to clinch a long-term agreement with Odisha Mining Corporation and other private miners for securing iron ore till the captive lease was ready for operations. But sources said Posco was unlikely to proceed with its steel mill construction till it acquired mining rights for the Khandadhar iron ore deposits.

"It does not want a Vedanta-like situation and invest a large amount of money without raw material security," said an analyst.