India

POSCO suspends plans: Odisha still hopeful

18 Jul 2015 | By Siripriya
Odisha's Posco dream: A Mirage?

The South Korean steel giant POSCO suspended its $12 billion project in Odisha due to various regulatory approvals.

"We are tentatively suspending the Odisha (India) project due to lack of any progress," Posco Chairman and CEO Kwon Oh Joon said.

Amidst the the indications that the company might scrap the project, Posco India's spokesperson said that the company was not exiting from Odisha.

In context: Odisha's Posco dream: A Mirage?

22 Jun 2005Inception of Posco in Odisha

Posco India is a subsidiary of Korean conglomerate Posco (formerly Pohang Iron and Steel Company).

The parent company Posco had signed a Memorandum of Understanding (MoU) with the Odisha government on 22 June 2005.

This was to set up a $12 billion integrated steel plant of capacity of 12 million tonnes per annum in Odisha at Paradeep, in Jagatsinghpur district.

2006-08Environmental and social issues for Posco

Posco which got its first environmental clearance in 2007, faced protests from Posco Pratirodh Sangram Samiti (PPSS) fighting for the tribal rights.

The protests were mainly based out of Dhinkia village.

The Supreme Court in 2008 upheld the 'in principle' clearance of land for Posco and instructed the Ministry of Environment and Forests (MoEF) to examine the issue and grant approval under the law.

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Posco gets a final clearance after long wait

2011-2014Posco gets a final clearance after long wait

In Jan 2011, MoEF granted conditional clearance to Posco.

On 30 March 2012, the National Green Tribunal suspended the clearance and directed MoEF to review the approval accorded earlier.

In Jan 2014, MoEF revalidated the environmental clearance for Posco which had expired in 2012. The clearance was given on the condition that it would spend 5% of investment on "enterprise social commitments."

Posco MOU has expired

The 2005 Mou between Posco and Odisha government expired in 2010. Mired in controversies, the renewal has been dragging for years and has not shown any progress so far.

Feb 2015Ordinance on Mines and Mineral affects Posco

On 12 Jan 2015, the government of India promulgated the Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015.

As per the ordinance, Posco would have to participate in the bidding process to get access to the mines.

This meant that the highest bidder would be allotted the mines and Posco will have to pay a high price to gain access.

May 2015Indications of Posco exit

There were indications of Posco exiting Odisha. Few of them include-Ho Chan Ryu, the official in charge of project moving back to South Korea, pruning down of staff strength, etc.

Further, Posco had written to Odisha Industrial Infrastructure Development Corporation (IDCO) requesting refund of the money it had paid to acquire seven acres for peripheral activity.

These are seen as precursors to withdrawal.

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18 Jul 2015POSCO suspends plans: Odisha still hopeful