* Mining licence at advanced stage of processing
* Project stuck for 8 years
(Adds comments from analyst, activist)
By Krishna N Das
NEW DELHI, Jan 16 South Korea's POSCO
will be able to start work on its planned
$12-billion Indian steel plant over the coming weeks, India's
prime minister said on Thursday, ending an eight year delay for
environmental and legal clearances.
Manmohan Singh said the firm's request for an iron ore
mining licence - the final regulatory hurdle for the project
which would be the biggest foreign direct investment in India -
was at an "advanced stage of processing".
The 12 million-tonnes-per-year plant in the eastern state of
Odisha, formerly Orissa, will help world No.4 steel producer
India to expand output.
India produced 77.6 million tonnes of crude steel in the
past fiscal year, a fraction of top producer China's nearly 800
million last year. India's total iron ore reserve was estimated
at 28 billion tonnes as of 2010 by the Indian Bureau of Mines.
India's new Environment and Forest Minister Veerappa Moily
last week gave approval to the plant but asked POSCO to spend 5
percent of the total investment on social commitments, which
would raise the project's cost to $12.6 billion.
South Korean President Park Geun-hye's current visit to
India seems to have pushed forward the project that has been
hobbled by the delays in getting clearances, acquiring land and
obtaining an iron ore mining licence.
"I am very happy that the large-scale POSCO steel project in
Odisha is set to be operational in the coming weeks, following
the revalidation of its environmental clearance," the Indian
prime minister said after a meeting with Park, referring to the
start of construction work for the project.
"Grant of mining concession for the project is also at an
advanced stage of processing."
POSCO is expected to receive a prospecting licence, which is
generally valid for three years and after which a prospector
needs to apply for a mining lease.
Access to iron ore, the main raw material in making steel,
is the most important factor in POSCO deciding to set up the
plant in India, experts have said. POSCO officials say the
company came to India to have a strong base in an emerging
economy as its presence in China was below expectations.
Odisha lies in the heart of India's mining belt and holds a
third of the country's iron ore reserves, a quarter of its coal,
half its bauxite and more than 90 percent of its nickel and
chromite. The state accounted for about a fifth of all
industrial investment proposals in India in the last four years.
POSCO first signed an agreement with the state in June 2005
to build the plant on 4,004 acres of land. It is seeking 2,700
acres to begin the project's first stage, which involves setting
up two 4-million-tonne plants in two phases.
More than 1,700 acres have already been handed over to the
company, Trade Minister Anand Sharma said on Wednesday.
"We'll do everything possible to have the project
expedited," Sharma said.
"The government would like to reinstate its commitment to
foreign direct investment prior to the general elections (due by
May) by expediting the process," said Ashima Tyagi, senior
consultant at InfralineEnergy, a research and information
POSCO may have received most of the government clearances but
it is still waiting for India's environmental court to lift a
ban on felling trees for the project. The court's order was
pending the environment ministry's revalidation of lapsed
clearance for POSCO, which finally came through last week.
Though the company hopes the court will remove its order, it
could still face some protests from environmentalists and other
activists. POSCO's spokesman in India, IG Lee, did not
immediately reply to requests for comment.
"We have been fighting against this project for some nine
years and will continue to do so," said Prashant Paikray,
spokesman for anti-POSCO group POSCO Pratirodh Sangram Samiti.
(Additional reporting by Jatindra Dash in Odisha; editing by
Himani Sarkar and Keiron Henderson)