The Odisha government may offer steel giant Posco the option of a joint venture (JV) with state-run Odisha Mining Corporation (OMC) as the Centre and state try salvage the $12-billion project - the largest foreign direct investment in India so far.
Prime Minister's principal secretary Nripendra Misra on Tuesday held a meeting with mines secretary Balvinder Kumar, steel secretary Rakesh Singh, Odisha chief secretary G C Pati and Posco India chairman and managing director Gee Woong Sung on steps that could be taken to save the project, sources said.
"Both Prime Minister Narendra Modi and Odisha Chief Minister Naveen Patnaik do not want Posco to leave India. It was decided during the meeting that Odisha would again talk to the South Korean steel major and look for options that could be leveraged to save the $12-billion project," they added.
The PMO's intervention comes against the backdrop of the steel major temporarily dropping plans to set up a 12-mtpa integrated steel plant in Jagatsinghpur district in Odisha. "One of the options available, which Odisha is mulling, is that Posco can either set up the plant as a JV with Odisha Mining or Odisha Mining can be given iron ore mines and then Posco can have some arrangement with the public sector undertaking for setting the plant," sources said.
The Bhubaneswar-headquartered Odisha Mining mines minerals such as chrome, iron ore and manganese, which caters to the requirements of mineral-based industries such as steel, sponge iron, pig iron, ferro-manganese, ferro-chrome etc.
Besides, the Centre has also told Posco to try other options like forming a JV with public sector undertakings such as SAIL for setting up the plant.
The proposed project has been stalled for about a decade due to various regulatory hurdles, including delays in land acquisition and mining leases.
One of the world's largest steel makers, Posco, in the meantime has joined Uttam Galva Group to set up an estimated $3-billion steel plant in Maharashtra - the first Indian facility for the global giant. It has also signed a pact with Mesco Steel to shift its first Finex plant to Kalinganagar from Pohang in South Korea.