The first phase of Posco’s $12-billion Orissa project — India’s single-largest foreign direct investment — could start churning out steel by 2018, three persons with direct knowledge of the development told FE. The Orissa government resumed land acquisition for the project on Sunday, which continued on Monday as well. With the state land-owning agency Orissa Industrial Infrastructure Development Corporation resuming acquisition of the last 700 acres, Posco’s biggest hurdle has been removed.
The South Korean steel giant plans to start work on land preparation immediately after getting possession of 2,700 acres. The company expects production from its 8 million tonne (MT) first phase to start in the first half of 2018. The process of revalidating the environment clearance (EC) for the steel unit is almost complete. Sources said the certificate will come along with the land handover.
“We are positive to note the latest progress in handing over land to the company. Currently, the company is in possession of just 548 acres. We are ready with the plan to complete the 8 mt plant in five years once the entire 2,700 acres are handed over to us,” said a Posco India spokesperson.
Posco, which signed an agreement with Orissa to set up a 12 MT steel special economic zone at Jagatsinghpur at $12 billion way back in 2005, scaled down the size of the project to 8 MT last year due to the state government’s inability to acquire the required 4,004 acres. It now wants to set up two 4 MT steel units in 2,700 acres. It will go up to the planned 12 MT capacity depending on land availability.
“Demands of everyone who came forward with their claims on betel vines at the project site have been settled amicably. There could be some resistance even now, but we are hopeful this would be sorted out by the state government soon,” said another person associated with activities of Posco India since inception.
In March, 2012, the project’s EC was suspended by the National Green Tribunal after a 2011 clearance from the environment ministry.
“Everything is clear from our side. A subcommittee of the expert appraisal committee had visited the site and given a positive report,” said an environment ministry official. A Posco official said the project was pending at minister Jayanthi Natarajan’s level.
The company is also expecting a positive outcome of the case in Supreme Court over granting prospecting licence for 600 MT Khandhadhar iron ore