Even as Posco India is yet to submit a written response on the draft prepared for renewal of Memorandum of Understanding (MoU) with the Orissa government, the company is understood to have raised certain reservations over the omission of the iron ore swapping clause in the revised pact.
While Posco has verbally agreed not to export iron ore from Orissa, the steel maker has requested the state government to allow it to swap high alumina content iron ore found in Khandadhar mines with high grade ore of any other firm including state owned Orissa Mining Corporation (OMC) within the state, said a mines department official familiar with the development.
"Posco India is yet to submit its written reply to our draft MoU. However, the company, during discussions with the state government officials, has agreed to our other conditions including adhering to the employment clause and promoting ancillary industries around the mother plant,” said the source.
The state Chief Secretary B K Patnaik maintained that Posco India is yet to submit any written response in connection with the renewal of the MoU that lapsed on June 21 last year.
On Wednesday, Patnaik had said that the renewal of MoU with the South Korean steel behemoth had reached the final stage.
Despite commitments from top officials of the state government, the renewal of MoU with Posco India had suffered an inordinate delay. The state government had jumped three of its stipulated deadlines in the road to renewal of the pact.
The contentious issue of ore swapping has ostensibly delayed the renewal of MoU with Posco India.
The previous MoU, signed on June 21, 2005, allowed the company to export 30 per cent of iron ore reserve allotted to it and import same quantity of high grade ore. The company justified this concession saying the iron ore found in Orissa had relatively high alumina content, which required blending with high grade ore for better blast furnace life and productivity.
But with the company later deciding to use Finex process, which can use low grade ore, the need for ore swapping became redundant. Moreover, the then Union minister for environment and forest Jairam Ramesh and subsequently, the state steel and mines department had opposed the inclusion of swapping clause in the renewed MoU.
Apart from exclusion of ore swapping, the new MoU draft proposes sourcing of water for the project from Hansua river close to the project site instead of earlier plan to carry water from Jobra barrage in Cuttack on river Mahanadi.
Similarly, the employment clause in the new MoU draft, to which the company has informally conceded, stipulates reservation of jobs for local people in unskilled, semi-skilled and supervisory category. It may be noted, the state government has decided to include this clause in all new MoUs and those coming up for renewal giving priority to locals in employment in various posts.
