Posco unit to boost infrastructure

Paradip plant not to harm national interest: Orissa govt tells Centre.

The Orissa government has conveyed to the Centre that the proposed steel plant of Korean company Posco at Paradip would not in any way harm the national interest. The government also said the plant would lead to social and infrastructural development in the state.

In a reply to the Union mines and steel ministries on queries raised by the National Advisory Council, the state government said Orissa had enough iron ore reserves. The discovered reserves would last more than two decades, even after taking into account the commitments made under 37 memoranda of understanding signed by it, the government added.

The state government's comments were received on Tuesday. The reply also stated out of the 5,428 million tonne iron ore reserves discovered , 3,133 mt were committed under various leases, including 766 mt committed to the Steel Authority of India and other public sector companies.

Out of the remaining reserves, about 1,529 mt were committed under various the MoUs signed by the state government. About 98 mt iron ore reserves remained not committed.

The country was adding about 100 mt of iron ore annually through new assessments of the Geological Survey of India, government officials added.

Under the MoU signed with the state government, Posco was slated to build a 3 mt capacity steel plant, blast furnace, during the first phase between 2007 and 2010 at Paradip.

The final production volume would be expanded to 12 mt, taking the total investment in the project to $12 billion, including an initial investment of $3 billion during the first phase. The Orissa government would grant Posco mining lease rights for 30 years that would ensure the supply of 600 mt of additional iron ore.

On the issue of land requirement, the Orissa government's letter stated while the steel plant would require about 4,000 acre, the township development would need another 2,000 acre. Those displaced would be rehabilitated as per the rehabilitation and resettlement policy of the state government.

The NAC letter had also raised the issue of water requirement for the project to which the state government said the total requirement of the project would 3.5 cubic metre per second (cumec).

The Indian Oil Corporation's refinery at Paradip, the Paradip Port Trust and other industrial requirement would be another 1 cumec and 3 cumec, respectively. This would be met without affecting the irrigation requirements in the region, the letter stated.