A day after Union industry and commerce minister Nirmala Sitharaman said, Odisha government is answerable for the fate of Posco project, state steel and minister Prafulla Mallick today said, the state government is readying plans to address raw material problem of the South Korean steel maker.
"Posco can have iron ore supply assurance by arrangement of long-term supply linkage with Odisha Mining Corporation (OMC). We have enough iron ore for Posco's need," he said.
The South Korean steelmaker has been sending signals for withdrawal from its proposal to set up $12 billion steel plant in the state after the enactment of the new mining laws, which ended allotment of iron ore mines on preferential basis and introduced the provision to auction iron ore reserves. The new rule is contrary to the company's agreement with the Odisha government in June 2005, which said the steel producer would be allotted mines lease to feed its plant. The state government said, even if the owning a mines lease through preferential allotment is not possible any more, it has options to provide raw material linkage through OMC and said, Posco might not abandon the project.Sources have also indicated that OMC might enter into a joint venture with Posco to let the steel maker operate a lease.
OMC is a state government undertaking and holds leases for 11 iron ore mines, with production potential assessed at 30 million tonne per annum (mtpa). But due to clearances and operational inefficiency, the miner is producing only around two mtpa of iron ore. It has long term supply agreements as well as provision for online auction of raw materials for steel companies.
The speculation over the fate of Posco's mega steel project in Odisha has boiled down to a political war with Bharatiya Janata Party (BJP) questioning the sincerity of Biju Janata Dal (BJD) government over bringing in investment to the state. While the Centre said, it was the responsibility of state to facilitate the Posco project, Mallick today said, the company was upset because the Union government did not take any steps to grant it mining lease in time.
"All these things (talks of Posco withdrawal) would not have happened, had they cleared the files of iron ore lease for Posco in time," said Mallick.
Source: ET
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