Orissa okays Posco ore swap plan

Orissa has finally agreed to allow Posco an iron ore swap ratio of 30 per cent, thus clearing the last hurdle in the way of setting up of a 12 million tonne, Rs 52,000 crore steel venture by the South Korean steel major at Paradip.

The swap ratio was endorsed at a high-level meeting of the single-window clearance committee for mega projects here today.

The meeting was chaired by Chief Minister Naveen Patnaik and attended by several other ministers and senior officials. The meeting also authorized Patnaik to invite Posco for singing of MoU for the project. The MoU is likely to be signed on June 22.

Though Posco had brought down its iron ore linkage demand from 1,000 million tonne to 600 million tonne and agreed for 'no net export of ore', the company had insisted on export of a small portion low-grade (with high alumina content) ore from the reserve to be allotted to it in exchange of import of equivalent quantity of better quality ore from Brazil for the efficiency of the plant.

Though the state government per se was not against such exports, 'differences had cropped up over the quantity to be allowed for such swapping.

While Posco demanded export permission for 30 per cent of the allotted ore reserve, the state government was willing to allow it exports up to 15 per cent of the reserve against imports.

But finally bending to the demand of the company, Orissa government has agreed to allow the company a swapping ratio of 30 per cent which means Posco can export low grade ore upto 30 per cent of the reserve allotted to it against import of equivalent quantity of better quality ore.

However, the company has to first import the high grade ore from Brazil after which only it will be allowed to export equal quantity ore and not vice versa, asserted state mines minister Padmanabh Behera.