Posco eyes prospecting licence

Posco India, the Indian subsidiary of South Korean steel major Posco Steel, expects to get the prospecting licence for captive iron ore mines at Sundergarh and Keonjhar in Orissa, for its proposed 12 million tonne plant near Paradip, by September this year.

The company plans to hire a local company, which will use the latest technology for mining.

The company applied for the prospecting licence in September last year, the process is taking some time as there are multiple applications (for the same mine) being sorted out by the Orissa government.

"The directorate of steel and mines (of the Orissa government) is reviewing all the applications for the mine and is expected to finish the process in about a month or two. We are hopeful, the government will grant the prospecting licence to us," Chairman and Managing Director Cho Soung-Sik said.

Posco would not be directly involved in the mining operations but would hire a local firm to carry out the mining, with the latest technology, he added.

"We expect the licence to be granted by the end of September. We will explore the mining area with an Indian mining company for a year. We will be able to finalise the application for the mining licence by September next year," Soung-Sik said.

Once the 12 mt project gets underway, the company would need 20 mt of iron ore a year for its operations.

Posco India is targeting ore production by "at least mid-2009", six months before it starts production of iron ore, he said. As the mine is located about 300 km from the plant site, the company is in talks with the Indian Railways for the construction of a dedicated rail line to transport the ore to the Paradip port.

Rail Vikas Nigam has been brought onboard for constructing the rail link between the mining area and Paradip.

Also, a single line from the mine to Chandikhol will be operational by the end of this year, which will be sufficient to service the first phase of operations when the company will produce only 4 mt.

The double line, which will be needed to transport 20 mt of iron ore to the plant once the operations go full swing, is expected to be ready by 2010, and the company expects no problems in the schedule of railroad construction.