Villagers protest at POSCO's $12 bln India project

Sat Jun 11, 2011 3:47pm GMT

* Thousands of villagers refuse to back away from site
* Women and children form human ring
* Senior police officer says to 'maintain maximum restraint'
* Fresh protests may further delay POSCO project
By Jatindra Dash

BHUBANESWAR, India, June 11 (Reuters) - About 2,000 villagers protested against POSCO's planned $12 billion steel plant on Saturday, with women and children forming a human ring around the site.

Local opposition has long delayed the South Korean company building its 4 million tonnes plant, India's biggest foreign investment project, in the eastern state of Orissa. Protests have blocked infrastructure projects all across the country.

POSCO signed the agreement for the mill in 2005 and it was scheduled to begin production by the end of 2011. Protests, environmental concerns and government inquiries into alleged illegalities at a related mining concession have delayed it.

Environment Minister Jairam Ramesh gave the plant clearance in January on certain conditions, including ensuring that tribal rights and forest protection laws are observed.

Orissa's government started acquiring land for the world's No. 3 steel company after the environment ministry's January approval. POSCO needs 4,000 acres (1,600 hectares) of land.

Local officials tried to persuade the villagers to back away and not use women and children as human shields, media said.

About 500 policemen were deployed to try to control the protesters, roughly half them women and children.

"We will maintain maximum restraint," a senior police official, who did not wish to be identified, told Reuters.

Locals, who say the POSCO mill will deprive them of their forest-based livelihood, have refused to budge.

"They did not move despite repeated warnings," special land acquisition officer N.C. Swain said.

Swain said the government had already bought 1,800 acres.

"We will not allow them to enter into the site. We will continue our protest peacefully," Prasant Paikray, a protester, said. "We will fight this battle until last breath," he said.

Paikray accused the authorities of acquiring land forcibly.

ArcelorMittal, the world's No. 1 steel maker, has also faced years of delays in building several plants in India. Angry villagers are increasingly assertive in refusing to give up land for manufacturing plant. (Writing by Mayank Bhardwaj; Editing by Louise Ireland, sourced Thomson Reuters)