POSCO, India play hardball over Orissa investment
South Korean steelmaker Pohan Steel Company's (POSCO) decision to build a 12 million metric ton capacity steel plant in
India's Orissa state has hit a stumbling block because of a disagreement between the company and Indian government officials.
POSCO reportedly asked for one billion metric tons of
iron ore reserve from the government, while the Indian government maintains that it will provide POSCO with only 600 million metric tons. The Indian government points out that the 600 million metric tons is enough to satisfy the Orissa plant's future needs.
POSCO wants the one billion tons of
iron ore it had initially asked for because the South Korean steelmaker reportedly plans to export the excess ore to its plants in
Australia. POSCO has made it clear that it will not invest in Orissa unless the Indian government agrees to the company's terms.
Orissa accounts for approximately 27% of
India's total
iron ore reserves at 3.5 billion metric tons.