Photo by: Reuters
KOLKATA (miningweekly.com) - In a last ditch effort to salvage South Korean steel major Posco’s Indian project, the Prime Minister’s Office (PMO) has convened a high level meeting this week to explore every option for the grant of iron-ore resources to the steelmaker.
According to an official in the Steel and Mines Ministry, the meeting would be held under the aegis of the PMO with the direct intervention of Prime Minister Narendra Modi, and attended by officials in the Steel and Mines Ministries, representatives from the Odisha provincial government and PMO officials tasked with monitoring megaprojects under implementation across the country.
He said that considering that Posco’s $12-billion investment was the single largest foreign direct investment (FDI) in the country, which had been hanging fire for over a decade, its scuttling would send the wrong signals to foreign investors.
Posco had put its 10-million-tonne-a-year Odisha steel project in cold storage and has vacated offices in the province. The official noted that a withdrawal by the company would have a negative impact on Prime Minister Modi’s ‘Make in India’ programme aimed at making the country a manufacturing hub rivalling China.
The Odisha government has been spurred to extend a "helping hand" to Posco after the Korean major announced a three-million-tonne-a-year steel production facility in collaboration with Indian steel producer Uttam Galva in the western province of Maharashtra - yet another possible indication that the Odisha project would not be pursued, the official added.
The PMO intervention and another round of stakeholder meetings were prompted by a communication from the Odisha Steel and Mines Ministry to the federal government, pointing out that the former’s proposal to grant iron-ore resources to the steel company from reserves under control of Odisha Mining Corporation (OMC) had failed to evoke a response.
The federal government, meanwhile, claimed that the Odisha government had failed to reply to a communication seeking clarification on the granting of a prospecting licence to Posco, indicating the communication gap between various government departments, which would need to be bridged by the meeting under aegis of the PMO, the official said.
However, it could not be confirmed if representatives from Posco India had been invited to the meeting later this week.
The Odisha government was expected to push the federal government to accede to its already-submitted plans that the Malangtoli iron-ore reserves, once earmarked for a joint venture (JV) of Rio Tinto and OMC, be handed over to Posco, as the JV company had now been dissolved. The Malangtoli mines had an estimated reserves of 700-million tonnes.