KOLKATA (miningweekly.com) – South Korean steel major Posco’s plans for securing iron-ore resources for its $12-billion Indian investments have been thrown a lifeline through the intervention of Indian Prime Minister Narendra Modi.
The project, which has been hanging fire for over a decade, was given a nudge following the Prime Minister’s two-day Seoul summit with Korean President Park Geun-hye, followed by a meeting with Posco CEO Kwon Oh Joon earlier this week.
Senior officials in the Steel Ministry said that the Indian Prime Minister held a series of talks on bilateral economic issues with Korean political and business leaders, but Posco investments, almost on the verge of being scrapped, did not specifically figure during this visit.
This initially was considered a disappointment, as Posco’s plans to set up a 12-million-tonne-a-year steel plant in the eastern Indian port town of Paradip, in Odisha, linked to the Khandadhar iron-ore reserves, represented the single largest foreign direct investment in the country, the official said.
However, soon after his return, Modi was reported to have pushed for several initiatives aimed at getting the stalled project off the ground. On the big picture of promoting India-Korea economic cooperation, the Prime Minister had already announced project “Korea Plus”, an institutional mechanism within the Indian government to specifically address all issues faced by Korean companies in investing in India and, clearly, Posco would be the top priority for such an institution, the official said.
Specifically on Posco’s investment, Modi reportedly instructed the formation of a joint team comprising officials of the Steel and Mines Ministries to address issues of iron-ore sourcing for the steel company.
A joint meeting of top brass, Ministers of Steel and Mines and Odisha Chief Minister Naveen Patnaik, would also be convened within the next few weeks to find a solution to the Posco logjam. Under the newly promulgated Mines, Minerals Development and Regulation Act 2015, the Steel Ministry turned down the allocation of the Khandadhar iron-ore reserves on preferential basis to Posco.
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