There were as many 237 applicants for the mines. The state government on December 26, 2006, recommended Posco India to the Centre for a licence to carry out prospecting over 6204.352 hectares of the Khandadhar mines in Sundergarh district. The Centre initially rejected the state governments recommendation of Posco.
In October 2007, the state government asked the applicants to submit their papers by the end of the month. There were initially 290 applicants for the mines, before the state government got rid of 53.
The major applicants were Central-sector Kudremukh Iron ore Company Ltd (KIOCL) and the Jindals. Sources in the government told FE, Now that the formality is over, the state government will recommend Posco India to the Centre for a PL. The state government, in fact, had given the Khandadhar mines to Central-sector Kudremukh Iorn Ore Co Ltd (KIOCL) for prospecting.
Three years ago, KIOCL, which comes under the control of the steel ministry, negotiated for a mining lease and entered into an agreement with state-run Kalinga Iron Works to set up a pelletisation plant. KIOCL had invested Rs 1.6 crore on drilling and prospecting Khandadhar mines. But the state government recommended Posco for a PL instead of KIOCL, which challenged the state governments decision in the Orissa High Court.