India Minister: Final Decision on POSCO Project by January-End

Courtsey news via The wall street journal by Saurabh Chaturvedi and Satish Sarangarajan
NEW DELHI -- India's Ministry of Environment and Forests will make a final decision on Posco's proposed steel plant in eastern India by the end of January, Environment Minister Jairam Ramesh said Wednesday.
Posco, the world's third-largest steelmaker, signed a pact with the government of Orissa state in June 2005 to build the integrated steel plant. At more than $10 billion, it was billed as the biggest foreign direct investment in India.
But the project, like those of ArcelorMittal and Tata Steel Ltd., has been delayed due to tough forest laws and stiff opposition from local people unwilling to sell their land.
The Korean steel giant's planned investment includes a 12 million metric ton a year steel mill, a captive power plant and a port on about 4,000 acres of land in Orissa's Jagatsinghpur district. Much of that land is in forests.
"We will be able to take a final decision by [the] end of January on the future of POSCO's integrated project in Orissa. The project includes three components; mining, steel making and the development of a port. We are hopeful of a final decision on all three segments," Mr. Ramesh told reporters on the sidelines of a conference.
Earlier Wednesday, local newspaper DNA, citing unnamed sources, reported that the environment ministry had cleared the Posco project.
"These reports are speculative, premature and baseless," Mr. Ramesh said.
A cumbersome regulatory approval process and land acquisition issues have hindered big industrial and infrastructure projects in India. According to the steel ministry, some $80 billion of investment for steel projects is stuck in various stages of the regulatory approval cycle.
The domestic steel industry is concerned about meeting the expected 10% annual growth in demand over the next decade and India's steel imports are rising rapidly. The country needs new plants to help meet the booming demand, particularly from the automobile and construction sectors.
Several foreign steelmakers have tried to capitalize on India's growth prospects, including Japan's Kobe Steel Ltd. and JFE Steel Ltd.
Kobe Steel recently signed pacts with Steel Authority of India Ltd. and Essar Steel Ltd. to explore the possibility of a joint venture, while JFE Steel last year acquired a nearly 15% stake in JSW Steel Ltd.
POSCO has also signed a pact with SAIL to set up a joint venture in India.
Russian steelmaker OAO Severstal has signed an initial pact with iron ore miner NMDC Ltd. to set up an India joint venture in the southern Indian state of Karnataka.
In a report earlier Wednesday, local newspaper DNA, citing unnamed sources, said the ministry had cleared Posco's India project.
"These reports are speculative, premature and baseless," Mr. Ramesh told reporters on the sidelines of a press conference.
Posco signed a pact with the government of Orissa in east India some six years ago to build the integrated steel plant at an investment of about $12 billion.

Tag : Posco, steel plant, Government of Orissa, Ministry of Environment and Forests