The Orissa government will scrutinize the fresh application submitted by Posco India for renewal of the Memorandum of Understanding (MoU) for its 12 million steel project in the state. The MoU had lapsed on June 21 last year.
The South Korean steel major is understood to have submitted a fresh application for renewal of the pact with the state government following the final order of the Union ministry of environment & forests (MoEF) wherein the ministry had raised reservations over exports of iron ore.
"It has come to my knowledge that Posco India has submitted a fresh application to the state steel & mines department for renewal of MoU. While the previous application of the steel maker may have been processed, the state government will examine afresh the latest application of the company. There needs to be a government order for renewal of MoU. During the process of renewal, all conditions mentioned in the lapsed MoU will be revisited", said Chief Secretary B K Patnaik.
On exports of iron ore by Posco, he said, the state government will take into account the stand of the Union ministry of commerce in this regard.
While granting the final forest clearance on the Posco project, Union minister for environment & forests, Jairam Ramesh had suggested that the revised MoU between the state government and Posco India needs to be negotiated in a manner that the exports of the raw material are completely avoided.
According to the original MoU signed between Posco India and the Orissa government on June 22, 2005, "Any export of iron ore by way of swap will be allowed only after an equivalent quantity of ore has been imported for the plant. The extent of the above quantity of iron ore by way of replacement for equal quantity of import of higher grade iron ore, will be within the framework of the Export-Import Policy of Government of India applicable from time to time."
The MoU had provisions clarifying that no export of iron ore will be allowed from the captive mine except by way of full replacement through the import of an equal quantity of high grade ore.
The South Korean steel major needs 600 million tonnes of iron ore of an average iron content of 62 per cent to meet the requirement of the proposed steel project of 12 million tonne per annum.