Financial Daily from THE HINDU group of publications
Thursday, May 19, 2005
Industry & Economy - Minerals
Posco may sign MoU with Orissa Govt next month
New Delhi , May 18
POHANG Steel Company (Posco) of South Korea is expecting to sign the memorandum of understanding (MoU) with the Orissa Government next month since the issue of exporting of iron ore stands resolved. And if this deadline holds, then the company plans to complete the first phase of setting up the plant in four years, by 2009.
Posco's Chief Representative (India), Mr Sang Moo Doh, told Business Line, "We have given our proposal to the Orissa Government and now it is for them to decide. We have said that we will not export iron ore. They have offered us 600 million tonnes of iron ore for mining."
"If any major obstacle does not arise, we will complete the project by 2009," he said.
As of now, advanced talks are on with the Orissa Government with regard to infrastructural issues, including roads, railways, water, power, ports and so on, that need to be finalised before the MoU is signed.
On reports that Australian mining major BHP Billiton has opted out of the project, Mr Doh said, "BHP is not out of the project. We would be talking to other stakeholders after the MoU is signed."
Posco's Orissa plan had hit a major hurdle initially when the company had asked for permission to export iron ore from India and linked it with their investment plans.
Following a furore from the domestic steel lobby and the Orissa Government's stand that value addition to iron ore mined inside the State has to be done in the State only, the company was forced to change its plan.
According to Mr Doh, the company's first phase will be a 3-million-tonne plant with an investment of $2.3 billion. The final plan is to set up a 12 million tonnes annual capacity plant.
As per industry standards, for manufacturing one tonne of steel the manufacturer uses 1.6 million tonnes of iron ore.
Meanwhile, Mr Ratan Tata, Chairman of Tata Steel, has urged the Minister for Mines and Minerals that Posco should be allowed to set up a plant in India and not export iron ore to other steel making countries.
But Government sources, on conditions of anonymity, told Business Line that the final agreement with the company may contain a clause by which Posco would be permitted to barter low iron content ore from India with high iron containing ore from some other country.
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