Rediff.com  » Business » Orissa panel to pilot Posco steel project

Orissa panel to pilot Posco steel project

October 06, 2004 11:39 IST

The Orissa government has formed a high-level working group to pilot the proposed mega steel venture of South Korean steel major Posco in the state.

This is in response to a letter by the Centre urging the state to facilitate the establishment of a 10 million tonne steel plant by Posco in Orissa.

Posco along with BHP Billiton of Australia intends to set up the plant at an estimated investment of Rs 39,000 crore (Rs 390 billion), which is the largest foreign direct investment proposal by any company in India.

The government has also decided that the Industrial Promotion and Investment Corporation of Orissa will function as the nodal agency for the project.

The working group will be headed by Orissa steel and mines secretary with secretary industry, secretary revenue, secretary water resources, chairman and managing director of Ipicol, CMD of Industrial Infrastructure Development Corporation of Orissa, CMD of Grid Corporation of Orissa, CMD of Orissa Mining Corporation, director state environment department and representatives of the company as its members.

The working group will meet from time to time to facilitate all statutory clearances for the project, arrange for necessary infrastructural facilities and monitor the progress of the project.

Meanwhile, South Korean president Roh Moo-Hyun, who is on a three-day visit to India, is likely to take up the matter regarding Posco's proposed investment during his discussion with top leaders of the country.

According to the proposal submitted with the state government, Posco will set up the plant in three stages. The company is looking at two alternative locations for putting up the project, one at Duburi in Jajpur district and the other at Dhamra in Bhadrak district.

Posco steel plant will come up in close association with BHP, which will meet the coke requirement of Posco plant as well as help the South Korean company in raising ore from its captive mines.

This apart, BHP also proposes to set up a two million tonne metallurgical coke plant, 100 mw co-generation unit, a iron ore beneficiation plant and a ferro manganese unit to cater to the need of various other steel plants coming up in the state. BHP intends to import about 12 lakh (1.2 million) tonne of coking coal from its mines in Australia to feed its coke plant here.

Earlier, a high-level delegation of Posco and BHP had met Orissa chief minister Naveen Patnaik in August and gave a presentation on the project. The team was led by Cho Sang Sik, executive vice-president of Posco and Peter Beavan, chief development officer of the BHP Billiton.

In the presentation, Posco and BHP had highlighted the need of allotment of iron ore mines for assured supply of raw material for the project. For a three million tonne plant, the requirement of iron ore reserve is estimated at 120 million tonne.

The chief minister has directed officials from the industry, mines and energy departments to study the project proposal of Posco and submit a report on it to him. The appraisal and decision on allotment of mines will take about two to three months after which a formal pact will be signed with both the companies.

With Posco and BHP already submitting their proposals and making known their requirements, sources said, it is now up to the state to facilitate the setting up of the project.
BS Correspondent in Bhubaneswar
SHARE THIS STORY