Posco welcomes apex court's verdict on Khandadhar mines

South Korean steel major Posco welcomed the verdict of the Supreme Court Friday regarding recommendation of prospecting licence for the Khandadhar mines in Odisha in its favour.

"We welcome the judgment. This will significantly help to expedite the project," Posco India chairman-cum-managing director Y.W. Yoon said in a statement.

He said the verdict comes at a time when there had been significant progress on land clearance for Posco's $12 billion steel project in the state's Jagatsinghpur district.

Posco signed a memorandum of understanding with the Odisha government June 22, 2005, for a 12 million tonne steel plant near the port town of Paradip, some 100 km from here, with an investment of US $12 billion, the largest foreign direct investment in India.

The project, scheduled to be set up by 2016, has been delayed due to various factors, including protests by local residents.

The state government had first recommended the Khandadhar mines in state's Sundergarh district in favour of Posco in 2006.

The central government had returned the recommendation to the state the same year and directed it to conduct hearing of all the applicants for the mines and submit the recommendation again after hearing all the applicants.

Based on this, the state government concluded hearing of all the applicants over two-and-a- half years and re-recommended the same in favour of Posco to the central government in 2009.

However, Geomin Minerals and Marketing -- one of the several companies that had applied for a share in the mines' resources -- had challenged the government's decision in the Odisha High Court, claiming that it had made the first application for a mining lease in the area in August 1991, which was not considered.

A bench of the Odisha High Court July 14, 2010, set aside the state government recommendation in favour of Posco. The state government had moved the Supreme Court against this order.

The Supreme Court Friday set aside the high court order, which had quashed the state government's recommendation. The apex court, however, asked the Central government to take a final call after considering all the objections.

Now that the Supreme Court has set aside the judgment of the Odisha High Court, Posco said it hoped that the central government will expeditiously look into the recommendation leading to a final decision soon.