Fresh blow to Posco as the firm needs to bid for ore mine

In a fresh blow to Posco, the South Korean steel major will be required to participate in auction to get iron ore mine to feed its USD 12 billion facility in Odisha instead of direct allotment as assured earlier.
When asked about the fate of Khandadhar iron-ore mine given to Posco by the state via dispensation route, Steel and Mines Minister Narendra Singh Tomar today said that all firms will have to participate in the auction process to get a mining lease.
"Even I will have to bid to get a mining lease," he told reporters, putting a lid on Odisha's demand that commitments should be honoured under the new dispensation to avoid sending a wrong signal to international investor community.

The development comes even as the company's proposed 12 million tonne per annum (MTPA) project at Jagatsinghpur district in Odisha is stalled for about a decade now.
Posco was previously promised the Khandadhar iron ore mine by the state for its mega steel plant, considered as the biggest FDI in India, but the actual allocation never happened due to delays in regulatory approvals.
A Posco spokesperson did not respond to repeated calls.

The company has a memorandum of understanding with the Odisha government that assures allocation of mining leases. However, following the promulgation of the Ordinance, which makes allocation of all mines through auction route only, the MoU will have no value.

Mines can be allocated even now through the dispensation route in case the Centre had already given concurrence or the state government issued a letter of intent "by whatever name it is called". This is not the case with Posco.
"Now, with the MMDR Amendment Ordinance 2015 is in public domain, it is not possible to offer the Khandadhar mine to Posco on preferential basis and this chapter is now closed. It will have to secure this mine by bidding," a source in the mines ministry told PTI.
"We are sympathetic towards the mega project and it is the Centre which is keen to facilitate the allocation as recommended by the state for the sake of such a large project.

"But, by the time they (Odisha government) could send the proposal meeting the required technicalities, the Ordinance was already in public domain for feedback," he said.