SC clears Posco, Vedanta projects

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Posco and Vedanta on Friday joined ArcelorMittal in obtaining vital clearances to jumpstart their mega mining projects in India, which had been stalled for at least two years. The combined value of the investment in Orissa is expected at $33 billion.

A Supreme Court committee approved Poscos plans to clear forests to produce 12 million tonne (mt) of steel a year at Paradip, while in another order, the court allowed Vedanta Resources to mine bauxite at Niyamgiri forest to feed its 1.4- mt alumina plant at Lanjigarh.

On Thursday, ArcelorMittal started acquiring land for its 12-mt-a-year steel plant at Keonjhar, with the people of two affected villages giving their formal approval to the project. Clearances for the projects could create multi-billion dollar linkages across several sectors in eastern India.

Under existing environment laws, a central empowered committee of the Supreme Court gives final clearance for industrial use of forestlands. Posco, Asias third-biggest steelmaker, from South Korea, received clearance that will allow it to finally start construction at the site. The project, estimated at $12 billion in FDI, has been in limbo for over three years after protests by environmental groups and consequent delays in getting mining licences.

Vikash Sharan, general manager, corporate affairs, Posco, described the committees nod as a big step. “We will start construction soon,” he added. The ministry of environment & forests will now issue an executive order for the Orissa government to allocate land for the project. In Fridays hearing before the committee, the state government promised iron ore security for the project, which expedited the decision.

Posco can buy iron ore from the state government-owned Orissa Mining Corporation, which owns all mines in the state, besides elsewhere. In the first stage, Posco plans to build a 4-mt factory and a 400-mw power plant within three years.

A bench headed by Chief Justice KG Balakrishnan cleared the project of UKs Vedanta. The companys Sterlite Industries (India) Ltd met the Supreme Courts terms for the bauxite-mining project. The conditions for mining in the ecologically fragile Niyamgiri hills set out by the court included partnering with a state agency for a permit. The project will cost around $1 billion.