Orissa may allow ore prospecting to Posco

In what is seen as a milestone for the proposed 12 million tonne steel project of Posco in Orissa, the state government has recommended grant of prospecting licence (PL) for Khandadhar iron ore mines in Sundergarh district in favour of the company.

With Posco facing resistance from the locals of Paradip "� the site of the project, the move is seen as a major moral booster for the company.

The PL recommendation coincided with the visit of Posco CEO Ku-Taek Lee, who met Chief Minister Naveen Patnaik in the city on Tuesday to discuss the delay in land acquisition and other issues related to the project.

The recommendation for PL to Posco would be sent for the Centre approval in a few days, sources said.

The company had applied for PL for three mines, including Khandadhar and Thakurani (in Keonjhar), but the state government decided to forward the application for Khandadhar to the Centre now, they said.

The sources said the iron ore reserves in Khandadhar mines would be known only after prospecting. As per the MoU with the Orissa government, Posco needs 600 million tonne iron ore reserves to meet its requirement for 30 years. As per the present policy, the prospector gets priority in allotment of mining lease.

Posco, which had submitted the application for PL in September last year, had been worried over the long time being taken for the recommendation, besides the delay in land acquisition.

The sources said the PL recommendation had to be done after considering the applications of other claimants to the property. "This is a lengthy process," they said, adding "the company also had to attain certain milestones before it was eligible for grant of PL as per the MoU conditions".

Posco, while committing itself to the construction of Haridaspur-Paradip railway line, a project being implemented through public-private partnership, had put forth the condition that it would withdraw from the project, if PL/ ML (mining lease) was not recommended by October, 2007.