South Korean steel major Posco is trying to mount pressure on the Karnataka government to secure iron ore mining licences, before it agrees to zero in on the site for its proposed integrated steel plant in the state.
Recently a high-level team of officials from the company had visited Karnataka, but did not finalise the site for the proposed steel plant despite the state trying to convince them to do so. Sources close to the development told FE that although the state government has recommended a few sites, the company is delaying the finalisation of the site in a bid to exert pressure on the state for obtaining recommendations for a couple of iron ore mining licenses.
Talking to FE, VP Baligar, principal secretary of commerce and industries department of Karnataka, said the Posco team held meetings with the government but did not visit any site recommended for them in various districts in the state.
?They came here and discussed about mining licenses. The government will consider their application,? he said. The company has applied for mining licenses to mine iron ore in various areas in the state, where iron ore content is high.
?In one area, the company has applied for 300 hectares and in another it has applied for 500 hectares for mining iron ore,? the principal secretary said. ?The state government can only recommend, as the Centre has to approve iron ore mining licenses,? he added.
?Meanwhile, they have to decide at their corporate level about the site for the steel plant. I?m sure they will come again,? he said. The company is considering places like Bellary and the Koppal belt for the steel plant..
Earlier last month, the state government had formally cleared the steel plant proposals of Posco and ArcelorMittal, the world?s largest steel maker. Posco would pump in Rs 32,300 crore to establish a steel manufacturing facility to produce 6 million tonne per annum (mtpa) while ArcelorMittal would invest Rs 30,000 crore for 6-mtpa capacity plant in Karnataka. According to analysts, Posco is cautious with its Karnataka project due to its bitter experience in Orissa, where the company over the past four years could not establish its proposed Rs 54,000 crore steel plant project due to problems of land acquisition and regulatory approvals.
However the Karnataka government is keen on completing all official procedures, including notification of land, for Posco before the commencement of the global investors meet scheduled in June. It believes that deals with Posco and ArcelorMittal will create a conducive industrial climate in the state that would help the government to canvas larger industrial investments during the investors meet.
While Posco has not made any progress till-date, the state government has already notified around 4,900 acres for ArcelorMittal?s steel project at Kudithini village in the iron ore rich Bellary district. This is the second notification by the state government for ArcelorMittal. Earlier in January, the government notified 4,000 acres in Bijapur district for ArcelorMittal. But the company has not accepted it and was keen on getting lands in iron ore rich Bellary district. As per the wish of ArcelorMittal, the state government notified lands for them in Bellary district in the first week of February.