POSCO’s Orissa project further delayed by local India court

Friday, 03 July 2009 15:46:51 (GMT+3)   |  
       

Orissa High Court has extended the status quo order on the granting of a mining license by India's central government for the Khandadhar iron ore mines in the Sundargarh district of the eastern Indian province of Orissa, until August 5, 2009.

The high court also put off the hearing on the case pertaining to the recommendation of the Orissa government for the granting of a mining license to the South Korean steelmaker POSCO until then.

In 2006, POSCO applied for a license for the iron ore deposits in Khandadhar, Thakurani and outer Malangtoli in 2006, after it signed a memorandum of understanding with the Orissa government in June 2005 to build a 12 million mt integrated greenfield steel plant by 2016 in the Jagatsinghpur district of Orissa.

The Orissa government has twice recommended POSCO (currently building a steel mill in the state) to the central government for a mining license for the Khandadhar iron ore mines covering over 2,500 hectares. However, billed as the largest foreign direct investment (FDI) proposal in India, POSCO's project has been unable to make much headway due to the resistance of locals to land acquisition.

India's state-owned iron ore pelletizer Kudremukh Iron Ore Company Limited (KIOCL), one of the 226 applicants for the mining lease at Khandadhar, earlier moved the Orissa High Court challenging the action of the Orissa government in recommending POSCO's name for the grant of the license without taking a decision on its application. Subsequently, the approval of the chief minister of the local government was obtained to issue a rejection letter to KIOCL.


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