New Delhi: South Korean giant Posco has won environmental clearance to build Rs 52,000 crore steel plant in Odisha, ending eight years of wait for a project that would involve the largest-ever foreign direct investment in India.
The clearance, which came a week before South Korean President Park Geun Hye's India visit, will however be conditional to Posco spending on "social commitments, which will raie the project cost by USD 600 million to USD 12.6 billion.
The new Environment Minister M Veerappa Moily last week revalidated environment approval for the project. The approval came after the steel plant was delinked from the port project.
The nod will pave the way for Posco to build a steel plant with an annual production capacity of 12 million tonnes.
"Yeah, I have cleared it (the Posco project). The approval was given about a week back," Moily told PTI.
Posco's integrated steel plant and port project was to originally come up on some 4,000 acres in the coastal town of Jagatsinghpur. However, environmental clearance and land procurement held up the project since 2005.
The steel project had received initial clearance from the Environment Ministry in 2007 and final approval was granted in 2011. The National Green Tribunal (NGT), a quasi-judicial body, however suspended the permit in March 2012 citing environmental concerns.
"Yes, we have just received the environment clearance and expect the project to move ahead after obtaining nod from the National Green Tribunal (NGT) for felling green trees," POSCO India spokesman I G Lee told PTI.
The NGT in May had put on hold felling of trees for the project.
As part of the approval given by Moily, Posco must spend 5 percent of its total investment on "enterprise social commitments," which will push to cost up by USD 600 million to USD 12.6 billion.
The environmental clearance for the project comes nearly nine months after a government-appointed panel of experts recommended reinstating an earlier environment clearance given to the steel mill.
Lee said the environment nod was given asking the company to spend about 5 percent of the total investment on enterprise social commitments.
He said the company was also hopeful of lease agreement with Odisha government soon, after which it will start work on the 4 million tonnes first phase plant.
"We are also waiting for the government (Odisha) to hand over the entire land to us," Lee said.
The steel giant had inked a pact with Odisha government in June 2005 to set up the plant on 4,004 acres of land. It needs 2,700 acres to commence work on first phase of the project, while the state government has already transferred 1,700 acres to it.
Meanwhile, officials in the MoEF said Posco's project comprised of two aspects - a steel plant and a port project. Moily delinked the two and granted approval for the steel plant. Environment clearance for the port is pending.
Posco's steel project had received initial clearance from the Environment Ministry in 2007 and final approval was granted in 2011. A year later, the approval was suspended by a quasi-judicial body, citing environmental concerns.
As per a Posco official if everything goes as planned, the Phase 1 of the project might be commissioned in 2018 while Phase II would be completed three years after completion of Phase I, and Phase III will be commissioned within three years after Phase II.
The project will include iron ore mine development over 30 years (total 600 million tonnes) at captive mines located in the Keonjhar and Sundergarh districts of Orissa, as well as development of related infrastructure.
Last year, facing inordinate delays in land acquisition and local opposition, Posco scrapped its proposed Rs 30,000 crore project in Karnataka.