Before it renews the MoU with Posco, which expired last year, the Orissa government will take a fresh view on the steel company?s original demand that it be allowed to swap 30% of the 600 million tonne iron ore it mines in the state with ore brought from Korea.

This comes after environment minister Jairam Ramesh?s observation that the South Korean company should not be allowed to export iron ore. While issuing the forest clearance to Posco, Ramesh said that he had found the iron ore export clause ?deeply uncomfortable?.

?We will certainly take a fresh view on this issue,? state steel & mines minister, Raghunath Mohanty, told FE. He said the state government would take a decision after consultations with the South Korean company and other stake-holders of the project.

Posco-India?s managing director Gee-Wong Sung, is meeting the state chief secretary BK Patnaik, on Tuesday night. The meeting is likely to discuss iron ore swapping, land acquisition and other issues. The MD on Tuesday morning had a meeting with the state agriculture minister, Dr Damodar Rout, a strong supporter of the Posco project who was till recently representing the the Ersama-Balikuda constituency under which falls the proposed Posco project site.

As per the MoU signed with Posco-India in 2005, the South Korean company can swap up to 30% of its total iron ore requirement of 600 million tonne for the project. The MoU is very clear that there would be no net export. The swapping of iron ore is required for blending as the ores available in Orissa have high alumina content.

However, steel industry watchers say with the Finex technology, which Posco-India is going to use for its Orissa plant, the high alumina content in the locally available iron ore would not be a problem.With technology,which has been patented by South Korean steel major Posco, iron ore of lower grade can be used in the blast furnace. Posco-India too is not insisting on the swapping of iron ore.

The state government , in fact, has started reworking the MoU which is going to be renewed.

A top official involved in the task told Fe that Posco-India has agreed to the state government?s proposal for job reservation in the project for locals. The state government has agreed not to insist for a higher rate for the land. As per the MoU, the state government had committed to provide the land at a cost of R25,000 per acre. The rate has been revised to R5 lakh per acre as per the Industrial Policy Resolution (IPR) 2007.

The official, however, said that the renewal of the MoU would take some more time as it has to be cleared by various concerned departments like industries, steel & mines, water resources, law.

Meanwhile, the Industrial Infrastructure Development Corporation is gearing up to resume the land acquisition process at the Posco site.

?We are expecting the government order for the land acquisition in a day or two,? said the IDCO chairman-cum-managing director, Priyabrata Patnaik. He asserted that it would take a month to vacant the land and hand over the same to Posco-India.