)
Posco's planned $12-billion steel project in Odisha moved a step forward on Friday after the Supreme Court handed a decision on a mining licence to the central government, raising the South Korean firm's chances of getting preferential access to iron ore.
The apex court asked the Centre to take a decision after looking into all aspects of the project, billed as India's largest foreign direct investment, and hearing all parties before granting a prospecting licence to the company.
The apex court set aside a 2010 order of the Orissa High Court that had quashed the state government's recommendation of allotting a prospecting licence for the Khandadhar iron ore mines in Sundergarh district to the steel giant. The court had passed the order on a petition by a rival firm, Geomin Minerals & Marketing Ltd. Dissatisfied by the high court judgment, the state government, Posco India and Geomin Minerals approached the Supreme Court.
The apex court's decision has removed a major roadblock for the steel company. But the world's fourth-largest steel producer still has to overcome many obstacles before it can lay its hand on the recommended captive iron ore deposit, crucial to its proposed 12-million-tonne plant near Paradip.
The process of the Centre hearing all dissenting voices could be a time-consuming process, said sources. Besides, Khandadhar being a forested and tribal dominated area, akin to the topography of Niyamgiri where Vedanta is facing problems in mining bauxite, issues of compliance with the Forest Rights Act and the environment impact of mining activity could become hurdles for the company.
Shares of Posco, which counts billionaire investor Warren Buffett as a shareholder, cut their losses after the news to end down 1.24 per cent, in a wider Seoul market that closed 1.8 per cent lower.
Local social activists and environmental groups are already gearing up to intensify protests over allowing any mining operation at Khandadhar. "Mining activity on a huge scale will upset the region's overall ecological balance," said Biswajit Mohanty, member of the National Board of Wildlife.
Posco India welcomed the judgment. "We believe this will significantly help expedite the project. We are happy that it has come at a time when there has been significant progress on the land clearance work for the project," said Y W Yoon, Chairman-cum-Managing Director, Posco India.
| HOW THE PROJECT PROGRESSED |
|
Jun 22,’05: Posco signs MoU with Odisha government to set up a 12-million-tonne greenfield steel plant near Paradip for $12 billion Aug ‘05: Posco Pratirodh Sangram Samiti formed to oppose the project Aug 8,’08: Supreme Court upholds “in principle” clearance for use of forestland for the project Dec 29,’09: Ministry of Environment and Forests (MoEF) grants final clearance for diversion of forestland Jul 14,’10: High court cancels grant of prospecting licence to Posco for Khandadhar iron ore mines Oct 29,’10: Odisha government moves the Supreme Court against the high court order Aug 6,’10: MoEF issues "stop work" order to Odisha government based on the report of a panel to study implementation of Forest Rights Act at Posco site |
Jan 31,’11: MoEF gives conditional environment clearance to the Posco project
May 2,’11: MoEF lifts stop-work order
Mar 30,’12: National Green Tribunal suspends environment clearance granted to Posco
May 9,’13: Odisha government says the milestone of acquiring 2,700 acres to enable the company start first phase of work will be achieved within a week
May 10,’13: Supreme Court strikes down the high Court order and asks the Centre to take a decision on grant of prospecting licence for Khandadhar mines to Posco
Litigation in the high court was started by Geomin Minerals, arguing it had applied for the licence in 1991, much before Posco entered the field. Some 16 companies joined later to challenge the government's choice of Posco. They called the government stand arbitrary and illogical.
The high court accepted the plea and asked the government to rework the exercise of choosing the candidates for issuing licences.
Mineral laws, environmental issues and objections of the local people against land acquisition had bedevilled the project. In January 2009, the state government recommended that the Centre grant Posco a licence for prospecting on 2,500 hectares, relying on Section 11(5) of the Mining and Minerals (Regulation and Development) Act. According to the government, that provision granted it power to grant licences for prospecting and mining on a preferential basis. The Centre can decline to accept the state government's recommendation in favour of Posco after taking an overall view.
