This ad will auto close in 10 seconds

Posco ready to sacrifice export clause; new pact soon

Last Updated: Monday, June 25, 2012 - 17:56

New Delhi: South Korean Posco has agreed to do away with a contentious clause that allowed it to export iron ore, paving the way for a new pact between the steel major and the Odisha government for a downsized 8 MTPA steel-to-port project.

"We will sign a Memorandum of Understanding (MoU) very soon with Posco-South Korea and Posco-India for initial 8 million tonne per annum (MTPA) capacity steel mill near Paradip as the company has agreed for a new swapping clause doing away with the earlier export provision," Odisha Mines Minister Raghunath Mohanty said over phone.

Under the new clause, the steel giant will be allowed to swap up to 30 percent of the required iron ore within the country through the Orissa Mining Corporation (OMC), Mohanty said.

The export clause in the now lapsed agreement was was a bone of contention between Posco and the state government, delaying the renewal of the pact, Mohanty said.

It has been resolved and the government is expediting the process of land transfer to the company and it will pave way for faster launch of the project, he added.

The MoU between POSCO and Orissa signed on June 22, 2005, which expired in 2011, had the provision that the company could export as much as 30 per cent of iron ore from the state and would have to import a similar quantity.

Last year, former Environment Minister Jairam Ramesh had asked Odisha Government to negotiate the new MoU in such a fashion that export of iron ore are completely avoided. Besides Ramesh, opposition parties in the state were also opposed to the idea of exports.

On land front, Mohanty said the government has expedited the process of transfer of 1,500 acres of land to the company out of 2,000 as POSCO required 2,700 acres of land for initial 8 MT plant, to be later expandable to 12 MT. The balance 700 would be acquired soon, he added.

For the 12 MT plant to be set up at an expenditure of USD 12 billion, POSCO requires 4,004 acres of land. The project hangs fire for the last seven years.


First Published: Monday, June 25, 2012 - 17:56
comments powered by Disqus