July 4th (Economic Times) – South Korean steel giant Posco’s $12 billion project in India, one of the largest investments proposed by an overseas company, may finally get going with the government expected to give nod to its proposal for iron ore mining lease and forest diversion clearance plan almost simultaneously next month. The project has been awaiting formal clearances for almost three years now.

Grant of the two clearances would be major step forward in salvaging the steel major’s 12 million tonne (mt) steel project that has been in the midst of controversy ever since an MoU was inked in 2005. The company hopes to begin work on the first phase of 4 mt capacity immediately after getting land and mining clearance and targets to complete it ahead of original schedule of 36 months.

“The government is according utmost priority to the Posco project. In this regard its proposal for prospecting licence for Khandhadhar iron ore block in Orissa would be given as soon as the state sends its recommendations to the Centre. The Supreme Court’s Central Empowered Committee (CEC) on environment has also said that it would recommend for land diversion clearance once there is clarity on mining lease for the project,” an official source connected with the project told ET.

The project requires captive iron ore mines with reserves of about 600 mt. While the state has identified three blocks at Khandhadhar, Melang Toli and Thakurani for the project, only Khandhadhar is close to be being offered to the steel maker. The state is conducting a public hearing from other applicants for the same block and expects to conclude the process by July 26, before finalising the name of Posco as the most deserving applicant for the iron ore block with a firm investment commitment and project development plan. Though the mining block has a reserve of about 200 mt of iron ore, sufficient to meet just one-third of Posco’s total requirement, it could support entire first phase of the steel project.

On the forest diversion plan clearance, the matter has reached the final stages as both state and the Centre have cleared the application and CEC is waiting for clearance of mining rights before recommending PL for Khandhadhar in favour of Posco. The company has submitted its application of forest diversion plan for changing the land use of 3,093 acre of forest land on its project site of 4,004 acres. This clearances would mean that Posco would be in possession of over 3,500 acre of government land soon. It would then begin the process to acquire the remaining about 450 acre of private land.

“We could begin work on the project even if we get a portion of the total project land,” a Posco spokesperson said. Anticipating final lot clearances for the project soon, the company has already finalised a rehabilitation and resettlement plan that has even bettered the one finalised by the state government.