Setting at rest speculation over allotment of excess iron ore to Posco for setting up a steel plant in Orissa, the state government today clarified that it would provide the company only the quantity required by the installed capacity of the project.
The South Korean steel major has proposed to set up a 12 million tonne steel plant in the state at an estimated investment of $10 billion. The company has sought 1 billion tonnes of iron ore reserves for the purpose.
According to an industry thumb rule, the project needs around 960 million tonnes of iron ore for a life span of 50 years. The state government policy assures raw material linkages to a new project for 25 years. Thus the state government is committed to providing only 480 million tonnes of ore to the company.
While asking for double its entitlement of reserves, the company had stated its intention to export half the allotted ore. This had kicked off a row in the state, with critics questioning the wisdom of allotting 1 billion tonnes to one company out of the total 3.5 billion tonnes of iron ore reserves available in the state, that too when half the allotted quantity was meant for export.
Replying to the concerns of Opposition members in the Assembly on Wednesday, Orissa's Steel and Mines Minister P Behera said, "Posco will be allotted as much ore it requires based on the installed capacity of the project." Stating that the allotment policy of the state government veered around the value addition to minerals within the state, he said discussions with Posco were guided by this policy.
The Posco project will be set up in phases. The first phase will have an installed capacity of 3 million tonnes. Subsequently, 3 million tonne modules will be added every two years.
Pointing out that the Orissa government considered the Posco project important for the industrial growth of the state, Behera said the Centre had also extended all cooperation for the smooth implementation of the venture.
He pointed out that at a meeting called by the Prime Minister's Office on April 4 to take stock of progress on the project -- attended by the state's chief secretary and mines secretary and Posco executives -- various issues relating to infrastructure problems like railway and road links were discussed.
Steel needs
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South Korean steel major Posco has proposed to set up a 12 million tonne steel plant in Orissa at an estimated investment of $10 billion
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The company has sought 1 billion tonnes of iron ore reserves for the purpose
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The project is estimated to require around 960 million tonnes of iron ore for a span of 50 years
- The state government is committed to providing only 480 million tonnes of ore to the company
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