The steel major is eyeing Orissa’s Kandhadar iron-ore mines, estimated to have a reserve of about 150 million tons. The state government only yesterday has completed the hearing on all the 227 applications for the mine.

Posco’s total requirement is 4,004 acres, of which 3,586 acres is state land and 436 acres private. Within the state land, 2,953 acres is forest land and to change its land use for industry purposes, there is a provision under Forest Conservation Act, entailing creation of alternate forests to mitigate the industry’s adverse impact on environment.

The Supreme Court cleared this proposal and it will facilitate transfer of land to Posco India by Orissa.

While issuing a direction to the Orissa government to dispose all pending Posco’s applications seeking prospecting licences within four weeks, it also asked the state to send its recommendations to the Ministry of Environment and Forests, which would then “proceed in accordance with law.”

The bench also asked the Orissa government to undertake implementation of compensatory afforestation plan under the supervision of a Supreme Court-appointed committee comprising top officials of the state government.

Welcoming the decision, Posco India Senior General Manager Vikash Sharan said, “We reiterate our firm commitment to the project and are determined to move ahead in terms of land preparation and construction activities at full speed.”

Posco, the world’s third-largest steel producer, on June 22, 2005 entered into an MoU with the Orissa Government for the steel plant in the state. Posco counsel Mukul Rohtagi contended that the state government-owned Orissa Mining Corporation had agreed to supply uninterrupted iron ore and other minerals for its steel project and had identified mines in the western part of the state, some 300 km away from its project site. “Unlike bauxite mines, there is no shortage of iron ore mines as India exports more than one million tonnes. The company can source raw materials on its own and can buy the same from the open market,” he said, adding “We are not dependent on prospecting licence.”

Posco’s total iron-ore requirement would be pegged at about 600 million tons for a span of 30 years once its plant reaches the optimum production capacity of 12 million tons. Rohtagi also submitted that it required a total area of 1620.496 hectares for the plant site which comprises 1253.225 hectares of forest land.

Senior counsel K K Venugopal, appearing for Orissa government, also supported Posco in saying that not only the state but the whole country would benefit from the project.

Posco contended that the Ministry, while giving clearance, had stated that 25 per cent of the land would be utilized for green coverage as the company expected to grow 2 million trees inside the project area as it had done in Gwangyang Steel works where it had planted 1.9 million trees. It also added that it had necessary clearances from Orissa Pollution Control Board.

According to Posco, the Central Empowered Committee had erred in linking the diversion project for the plant and port site with that of mining and other linkages, including railway, road etc. “The present proposal for the integrated steel plant and captive port is a qualified proposal in itself having substantial description of the environmental protection and elaborate provisions for compensatory afforestation,” the application had stated, adding the investment of Rs 51,000 crore ($12 billion) was being considered as the largest ever FDI in India.

The court was informed today that the state had yesterday concluded hearing of applications for the said mines. Resource security has been one of the main concerns of the court and this commitment coming from a state government paved the way for clearance of the forest diversion proposal.

The state’s steel and mines department heard a total of 227 applications for Khandadhar mines, in one of the largest-ever hearings done till date. While one company withdrew its application, 44 others did not participate, sources said. Khandadhar was in high demand because of the high iron content in its ore. It had become controversial after public sector Kudremukh Iron Ore Company Limited (KIOCL) took the matter to the Orissa High Court.

Though earlier the state had recommended Posco for the prospecting licence in December 2007, KIOCL challenged it, which prompted the Centre to direct the Orissa government to hear all applications according to the Mines and Minerals (development and regulations) MMDR Act, 1957, before making a final recommendation. On the Centre’s directive, Orissa began fresh hearing of the mines.

Last year, the Korean steel giant had already received the Ministry of Environment and Forests clearance for its mega plant in the coastal state’s Jagatsinghpur district and for its proposed captive port at Jatadhari.

What next for Posco

• Posco has to start physical acquisition of land. Depends on company’s acumen and Orissa govt support

• Orissa’s rehab policy in place. Posco’s has to be approved by the Orissa govt

• This includes: job to one member in each affected family; township, residential premises for workers and additional employment

• In many villages, migrants have squatted allegedly in the hope of striking a deal with the Korean steel giant; requires deft handling and negotiations