India will speed up the process of granting steelmaker Pohang Iron & Steel Company (Posco) an iron-ore-mining licence, seeking to end a four-year wait by the steelmaker to secure resources for its planned $12-billion venture in the country.
“We are looking into the matter and will get this done as soon as possible,” said Steel Minister Virbhadra Singh in early July, in New Delhi, while attending an industry conference. “We are working with the state government to expedite the matter.”
Land disputes and the delay in getting a mining licence prevented South Korea-based Posco from proceeding with one of India’s biggest foreign investments. Asia’s fifth-biggest steelmaker has yet to start building the 12-million-ton plant in the eastern state of Orissa. Work on the project, announced in June 2005, was scheduled to start in April 2007.
“We are hoping something good will happen,” said Posco India spokesperson Saroj Mahapatra.
The states of Jharkhand, Orissa and Chhattisgarh account for 70% of India’s coal reserves and 55% of its iron-ore, according to consulting firm McKinsey & Co.
Posco faced opposition in Orissa as locals and political parties want the plant to be moved to nonarable areas away from farmlands.
Indian Prime Minister Manmohan Singh in July last year told South Korean President Lee Myung Bak at a summit in Japan that he would help Posco start construction work on the plant in August, according to a statement posted on the website of South Korea’s Presidential office.
Initially, Posco will build a four-million- ton plant and set up a 400-MW power plant. The company has sought 600-million tons of iron-ore for the steel mill.
Posco joins steelmaker ArcelorMittal in seeking to expand in Asia, where steel demand is growing faster than in Europe and the US.
In October 2005, ArcelorMittal said it would set up a factory with a final capa- city of 12-million tons, in Jharkhand, and announced another plant of the same size in neighboring Orissa the following year.
Meanwhile, demand for steel recorded its sharpest decline since World War II, the World Steel Association said in April, and output is set to tumble 15% this year.
Luxembourg-based ArcelorMittal said in April it would delay a $20-billion plan to build two factories in India. The world’s biggest steelmaker has slashed production by as much as 50% and shed jobs.