Posco's iron ore mining permit by Aug

South Korea's Posco may get an iron ore mining licence by August for the $12 billion plant in India, three years after it agreed to invest in the South Asian nation.

"We had asked the Orissa state for some clarifications and we hope the licence will be granted in three months,'' said J P Singh, secretary at the ministry of mines, in an interview in New Delhi yesterday. "The process is on."

Construction on the 12 million tonnes plant, the country's largest foreign direct investment, would start in October, six months later than planned, because of delays in allocating land and mining permits, Posco said on May 15. Three officials at the steelmaker's India unit were detained by activists on May 11, demanding the plant be moved to another location.

Posco said last June it would scrap the Indian investment unless it's granted exclusive access to an iron ore mine. The project would proceed "only if we are given a captive mine,'' Jeong Tae Hyun, former deputy managing director of the India unit, said on June 22.

The Orissa government in December agreed to give Posco a 30-year lease to mine 600 million tonnes of iron ore, the state's Steel Minister Padmanabha Behera said. Additional approval has yet to come from the central government, Behera said. The state holds a quarter of the country's iron ore reserves.

India may grant companies exclusive mining rights "" so-called captive mines "" after a government review panel submits its suggestions to revamp the nation's 50-year-old mining law. The panel is scheduled to meet May 28, Singh said.

"On that day, we will have a clearer idea as to when the mining policy will be announced,'' Singh said.

Meantime, Posco received environmental clearance from the government to build a port in Orissa, the company said May 20.

The steelmaker in July 2005 agreed to invest $900 million to build a port in Jatadhari in Orissa. The $12 billion includes the cost of developing an iron ore mine, building a railway line and securing water supplies.