Even as the process of renewal of Memorandum of Understanding (MoU) with Posco India has been hit by delay presumably due to the contentious issue of iron ore swapping, the Orissa government has maintained that the pact would be renewed by the end of this month.
“The process of renewal of MoU with Posco India is on. The pact will definitely be renewed by the end of July. The state government is trying to complete the process as soon as possible,” minister for industries and steel & mines Raghunath Mohanty told newspersons here.
Asked if the clause pertaining to swapping of iron ore would be included in the revised MoU, he said, “The Union minister for environment & forests Jairam Ramesh had proposed to exclude swapping of iron ore in the revised MoU. The matter is being scrutinized by the departments of law and steel & mines.”
He denied that Posco India had written to the state government on omission of the swapping clause.
“Posco India has only written to the state government regarding the modification in its project plan. As per the revised plan, the 12 million tonne per annum (mtpa) steel project would be set up in three phases of four mtpa capacity each”, the minister said.
The steel & mines department is against the inclusion of iron ore swapping clause in the revised MoU with Posco India.
In his final order on the Posco project, the Union minister for environment & forests Jairam Ramesh had also suggested the Orissa government to avoid swapping of ore.
The original MoU signed between Posco and the Orissa government on June 22, 2005 allowed swapping of 30 per cent of iron ore reserve allotted to the company. "Any export of iron ore by way of swap will be allowed only after an equivalent quantity of ore has been imported for the plant. The extent of the above quantity of iron ore by way of replacement for equal quantity of import of higher grade iron ore, will be within the framework of the Export-Import Policy of Government of India applicable from time to time," it said.
The South Korean steel major needs 600 million tonnes of iron ore of an average iron content of 62 per cent to meet the requirement of the proposed steel project of 12 million tonne per annum.
The MoU with Posco India had lapsed on June 21 last year. The revised MoU is likely to contain the mandatory employment clause of the state government.
The employment clause of the state government to which Posco India has given its consent stipulates that industries setting up their projects in the state have to reserve 90 per cent jobs for locals in the unskilled and semi-skilled category, up to 60 per cent in skilled category and 30 per cent for the supervisory and managerial cadre while giving them the option to fill up the post of senior executives from the open market.
