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After putting the project on hold last year, Union Environment Minister Jairam Ramesh on Monday granted conditional clearance for South Korean major Posco's $12 billion steel mill project in Orissa.

The ministry, while granting conditional green clearance for steel-cum-captive-power plant and a captive minor port, however, sought Orissa government's assurances before it can give final approval for diversion of 1253 hectares of forest land for the project, mooted as the single biggest foreign direct investment in India.

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"Environmental clearance for the steel-cum-captive power plant is being accorded with 28 additional conditions over and above stipulated in the original environmental clearance of July 19, 2007," Ramesh said in his order.

"The environmental clearance for captive port is being accorded with 32 additional conditions over and above stipulated in the original environmental clearance of May 15, 2007," the order signed by the Minister said.

Ramesh also asked Orissa government to give a categorical assurance that those claiming to be dependent on or cultivating the land in the Posco project area do not belong to the other traditional forest dwellers (OTFD) category under the Forest Rights Act, 2006.

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This, according to him, would make it clear that there are no legally tenable claims of non-tribals wanting recognition as OTFDs under the FRA.

"Final approval of diversion of 1253 hectares of forest land for the Posco project would be granted as soon as this assurance of the state government is received by the MoEF," the Minister said.

In August last year, Environment Ministry had directed the Orissa government to stop land acquisition for Korean steel giant Posco because it violates the Forest Rights Act.

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The step was taken on the basis of a ground report submitted by a three-member committee set up by the Environment and Tribal Affairs Ministries.

The state government and Pohang Steel Company (Posco), signed an MoU on June 22, 2005 for setting up an integrated steel plant of a total capacity of 12 million tonnes per annum at Paradeep in Jagatsinghpur district.

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The plant would be located on the northwestern bank of the Jatadharmohan river creek, 12 km south of the Paradeep Port requiring a total of 1620.496 hectares of land of which 1253.225 hectares is forest land and would affect eight villages in Erasama block of Kujang Tehsil.

The MoU also envisaged that the company would develop and operate a mining project in areas allocated by the government; a transportation project which includes a dedicated railway line, road and port; integrated township and water supply infrastructure.

But the project was delayed over green issues and protests by local residents who alleged that the setting up of plant would affect their largely agriculture and forest-based livelihoods.