No captive mines, no project, warns Posco

South Korean giant threatens to call off Orissa steel project.

The South Korean steel major Posco today made it clear that it may not go ahead with its $12-billion steel project in Orissa if the company was not allotted captive iron ore mines.

"There is no meaning coming here without the captive mining lease," said Soung-Sik Cho, chairman and managing director, Posco India Ltd.

Cho was responding to certain press reports that the Hoda Committee, set up by the Centre to suggest guidelines for a new mining and mineral policy, was against allotment of captive mines to the steel makers in the country.

The Posco-India chief, who addressed media persons on the eve of the first anniversary of the company's MoU with the Orissa government for its 12-million-tonne steel plant at Paradip, said both the Centre and the Orissa government had promised to give captive lease for 600 million tonne of iron ore for the proposed venture.

"We have no doubt that the leases will be accorded to us," he observed.

He revealed that the company has already submitted application for prospecting and mining licences which were now under consideration of the mines ministry. The company, at present, is preparing a mining development plan pending the approvals.

Apart from the captive mining lease, Cho said captive port facility and SEZ status to the project were vital to the viability of the plant. "We are hopeful of getting the necessary clearances in this regard," he added.

Cho, however, pointed out that the project work was delayed by around three months, compared to the original schedule, due to minor hiccups regarding land acquisition, procedural delays and infrastructure problems.

"But once we get over these problems, we can catch up with the lost time to meet our first phase commissioning deadline in 2010," he asserted.

He said the company planned to kick off site preparation for the steel plant construction and construction of piling for port by April 2007, as arrangements for water and power supply to the port and steel plant site were expected to be in place by March next year.

Admitting that the company was facing some resistance by the locals at its proposed plant site near Paradip for land acquisition, Cho said the problem was not serious in nature and would be sorted out through interaction with the families threatened with displacement.

He said the company will co-operate with the Orissa government in implementation of the rehabilitation and resettlement packages for the displaced persons.

Cho said Posco-India had modified its plant layout 60 times with the aim of minimising the impact of displacement, which has now been revised downward to only 400 families.

The company will soon be implementing a comprehensive CSR programme with a focus on local welfare.

The company proposes to build a human resource development centre at Paradip and also intends to inaugurate an office next month in Kujang near the project site, which is expected to open up a new channel of communication with the locals.

The project is estimated to create 48,000 direct and indirect jobs in the region and 467,000 man years of employment during the construction phase have been projected.

During the first phase itself, Posco-India is expected to offer direct employment to over 7,000 people. Moving in this direction, since the signing of the MoU, the company has already recruited Indians who now constitute 60 per cent of its employee strength and more are expected to join in the coming days.