State govt declines to give written commitment on allotment of iron ore mines to the steel giant.
Posco is unlikely to set up a steel plant in Karnataka, as the state government has not accepted certain conditions put forth by the South Korean steel giant.
Posco had sought a written commitment from the state government on the allocation of iron ore mines, land and water required for setting up its 6 million tonne per annum (MTPA) plant before selecting a location.
The govt could not give written commitment and it was open to treat all the applicants on equal footing, said Murugesh R Nirani, minister for large and medium industries, Karnataka. “Posco officials had asked us to give advance commitment on the allocation of water, land and iron ore required for setting up their plant. We told them that we couldn’t give them preferential treatment keeping other applications pending. We have assured them that we will treat all the applicants equally and give the same kind of facilities to all applicants like the Tatas, ArcelorMittal and Bhushan Steel.”
The Karnataka government has already given an in-principle approval to Posco for setting up its steel plant at an investment of Rs 32,300 crore in the Bellary-Hospet steel corridor.
Nirani said the company was yet to give consent on participating at the global investors’ meet, organised by the state government on June 3 and 4. “This does not mean that they will not come to invest in the state. But going by the current indications, we are not sure of their investment in the state. ArcelorMittal has already shown firm commitment to invest in the state by depositing Rs 270 crore to acquire land for their project,” Nirani told Business Standard.
“I personally feel that Posco may not participate at the global investors’ meet scheduled for June 3 and 4.”
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An official spokesperson of Posco India Pvt Ltd said: “We are looking at business opportunities across many states. We have also visited Karnataka a few months ago on the invitation from the state government. But, we have not selected any location for setting up the steel plant there.” He, however, refused to divulge any further details on their prospects of investing in Karnataka.
During Nirani’s recent visit to South Korea to conduct roadshows for global investors’ meet, senior management officials of Posco informed him that the company would send a team of technical officials to Karnataka to finalise the location for their proposed 6 MTPA integrated steel plant in April. However, the company is yet to visit the state to finalise the location.
He said the state government was in the process of working out a mechanism for allotment of land, water and iron ore to all the applicants who were looking at setting up steel mills in the state. “We have iron ore resources available for producing 45 million tonnes of steel per annum. We will make the allocation suitably,” he added.