South Korean steel major Posco has roped in two local firms for its proposed Rs 32,366 crore, six-million-tonne-per-annum facility in Karnataka mainly to ensure speedy clearances and uninterrupted iron ore supply.
It has already inked a pact with Bangalore-based Hothur Group and Goa-based Salgaonkar Mines, both of which have iron ore mines in Karnataka, and offered them 49 per cent equity in equal proportion, while retaining the majority with itself, a source close to the development told PTI.
The source said the agreement was inked close to three months back and the joint venture has already submitted its requests for land acquisition, mining leases and water supply with the state government.
By tying up with Hothur Group and Salgaonkar Mines in the project, Posco would have less headache in getting clearances apart from ensuring the plant uninterrupted supply of iron ore, a key ingredient for steel making.
Coking coal, another important raw material, would be entirely imported to feed the plant, the source said, adding that the consortium has already paid "a sizeable amount" to the state government for acquiring 3,000 acres of land for the project at Halligudi area in Gadag district of the state.
Roping in partners, seen by experts, is an excellent idea since this would help the steel major to expedite the project and thereby ensure an early presence in the growing market of India.
However, many find the genesis of the development in the delay in getting land in Orissa. Even after six years of MoU signing with the Orissa government for Rs 52,000 crore, 12 mtpa steel plant, Posco's project in the Eastern state still remains mired in uncertainty.
The Karnataka plant, the source said, would be developed in two equal phases of three mtpa. Here also, farmers are protesting against land acquisition for the project.