Posco, Asia's third-biggest steelmaker, may be forced to buy iron ore to feed its $12 billion steel plant in India should the government fail to award it a license to mine ore.
``There is a possibility of iron ore requirement coming ahead of our captive mining operations,'' S. K. Mahapatra, general manager at Posco India said today in an interview. ``In this situation, the state government has agreed to make the iron ore required available.''
Land disputes and delays in allocating mining licenses have stopped South Korea-based Posco from proceeding with potentially the biggest overseas investment in India. The company is yet to begin building the 12 million metric ton steel plant in Orissa state. Work was scheduled to start in April 2007.
``This decision to begin work as soon as they can and not wait for iron ore mines is a positive step since they are keen to set up this plant to tap India's demand,'' A.S. Firoz, an independent steel strategy analyst and former chief economist at India's steel ministry, said.
Posco joins ArcelorMittal in seeking to expand in Asia, where steel usage is growing faster than in Europe and the U.S. Posco faces opposition in Orissa as locals and political parties want the plant to move to non-arable areas from farmlands.
Indian Prime Minister Manmohan Singh pledged in a summit with South Korean President Lee Myung Bak in Japan that he will do his best to help Posco start construction work on the plant in August, according to a statement posted today on the Web site of South Korea's presidential office.
Initially, Posco will build a 4 million metric ton steel plant and set up a 400-megawatt power plant.
Source: Bloomberg
No comments:
Post a Comment