Bhubaneswar,: Posco, Asia’s third-biggest steelmaker, may be forced to buy iron ore to feed its $12 billion steel plant in Orissa should the government fail to award it a license to mine ore.
“There is a possibility of iron ore requirement coming ahead of our captive mining operations,” S. K. Mahapatra, general manager at Posco India said media today. “In this situation, the state government has agreed to make the iron ore required available.”
Land disputes and delays in allocating mining licenses have stopped South Korea-based Posco from proceeding with potentially the biggest overseas investment in India. The company is yet to begin building the 12 million metric ton steel plant in Orissa state. Work was scheduled to start in April 2007.
Posco joins ArcelorMittal in seeking to expand in Asia, where steel usage is growing faster than in Europe and the U.S. Posco faces opposition in Orissa as locals and political parties want the plant to move to non-arable areas from farmlands.
Initially, Posco will build a 4 million metric ton steel plant and set up a 400-megawatt power plant. The company has sought 600 million metric tons of iron ore for the plant.
“Iron ore mines are absolutely necessary for the plant and we are willing to make some stop-gap arrangements in case there’s a mismatch,” Mahapatra said.
