India will speed up the process of granting Posco an iron-ore mining license, seeking to end a four-year wait by the steelmaker to secure resources for its planned $12 billion venture in the country.
“We are looking into the matter and will get this done as soon as possible,” Steel Minister Virbhadra Singh said today in New Delhi, while attending an industry conference. “We are working with the state government to expedite the matter.”
Land disputes and the delay in getting a mining license prevented South Korea-based Posco from proceeding with one of India’s biggest foreign investment. Asia’s fifth-biggest steelmaker has yet to start building the 12 million metric ton plant in the eastern state of Orissa. Work on the project, announced in June 2005, was scheduled to start in April 2007.
“We are hoping something good will happen,” Posco India spokesman Saroj Mahapatra said today by telephone.
The states of Jharkhand, Orissa and Chhattisgarh account for 70 percent of India’s coal reserves and 55 percent of its iron ore, according to McKinsey & Co.
Posco faced opposition in Orissa as locals and political parties want the plant to be moved to non-arable areas from farmlands.
Indian Prime Minister Manmohan Singh in July last year told South Korean President Lee Myung Bak at a summit in Japan he would help Posco start construction work on the plant in August, according to a statement posted on the Web site of South Korea’s presidential office.
Initially, Posco will build a 4 million metric ton plant and set up a 400-megawatt power plant. The company has sought 600 million tons of iron ore for the steel mill.
Posco joins ArcelorMittal in seeking to expand in Asia, where steel demand is growing faster than in Europe and the U.S.
In October 2005, ArcelorMittal said it would set up a factory with a final capacity of 12 million tons in Jharkhand and announced another plant of the same size in neighboring Orissa the following year.
Meanwhile, demand for steel declined the most since World War II, the World Steel Association said in April, and output is set to tumble 15 percent this year.
Luxembourg-based ArcelorMittal said in April it would delay a $20 billion plan to build two factories in India. The world’s biggest steelmaker has slashed production by as much as 50 percent and shed jobs.
Source: Bloomberg
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