Posco can resume work on acquired land: Govt

The Orissa government on Thursday said, the South Korean steel major Posco can resume work on its proposed 12 million tonne steel plant near Paradip using over 2000 acres of government land already acquired for the project.

The government, however, was non-committal on time line for renewal of MoU with the company which has expired since June, 2010.

The issue of renewal of MoU with Posco is being vetted by the law department, said Chief Secretary B K Patnaik.

“We have already acquired around 2,000 acres of land for the Posco project. If the company wants to start work on this acquired patch of land, it can do so,” he said.

Asked if 2,000 acres of land was sufficient to build the 12 million tonne steel mill, Patnaik said, “Posco India has planned to build the steel plant in three phases. To begin with, 2000 acres is adequate to start work on the project. The construction of roads and rehabilitation colony may need some additional land which can be acquired later.”

He said, it was for the district administration and Posco to decide when to start work on the project.

The renewal of MoU with the South Korean steel firm that had expired on June 21 last year has been inordinately delayed with the state government jumping three timelines on this front.

The contentious issue of ore swapping has delayed the renewal of MoU with Posco India.

The previous MoU, signed on June 21, 2005, allowed the company to export 30 per cent of iron ore reserve allotted to it and import same quantity of high grade ore. The company justified this concession saying the iron ore found in Orissa had relatively high alumina content, which required blending with high grade ore for better blast furnace life and productivity.

But with the company later deciding to use Finex process, which can use low grade ore, the need for ore swapping became redundant. Moreover, the then Union minister for environment and forest Jairam Ramesh and subsequently, the state steel and mines department had opposed the inclusion of swapping clause in the renewed MoU. Posco India is understood to have agreed against export of ore but has proposed swapping it within the country. The proposal is under scrutiny of the state government.