Odisha steel project: Posco needs to file fresh proposal.

South Korean steel major Posco would have to file a new proposal for setting up its proposed $12-billion steel venture in Odisha if it wants to pursue the project.

The company was sounded about it at a recent meeting among officials of the Central government, state government and Posco, convened at Delhi by the cabinet secretary, to break the impasse over the project, hanging fire for 10 years.

'Due to changed circumstances for raw material linkage, Posco has to file a fresh proposal,' a senior government official said. 'Posco is yet to respond to us on this.'

The need for filing anew, according to sources, arises out of denial of allotment of captive mines to the company on a preferential basis following amendment to the Mines and Minerals Development and Regulation (MMDR) Act. With Posco unwilling to take part in the auction process to get hold of a captive mine in line with the provisions of the new Act, there are two ways now to meet its raw material needs.

One is a possibility of a joint venture between Posco and state-owned Odisha Mining Corporation (OMC) for operation of an iron ore mine to be reserved for the state public sector undertaking. The second is a pact between Posco and OMC for supply of raw material to the company from one of the mines owned by the latter.

At the Delhi meeting, the Centre asked the Odisha government and Posco to carry forward bilateral talks on the options, while making clear there would be no exception for Posco on allotment of a captive mine.

The earlier proposal hinged on establishment of the project based on allotment of a captive mine. With that possibility vanishing, the company has to decide on what arrangement it wants to enter with OMC to ensure raw material security if it wants to pursue the Odisha project, sources said.


BS