"The state government has filed a special leave petition in the Supreme Court today (Friday) against the high court order," Steel and Mines Minister Raghunath Mohanty told IANS.
"The state steel and mines department had recommended the Khandadhar mines in favour of POSCO as per the Mines and Minerals (Development and Regulation) Act. There was no violation," he said.
A bench of the Orissa High Court July 14 set aside the state government permission to POSCO for prospecting iron ore in over 2,500 hectares in the Khandadhar hills in the state's Sundergarh.
The court had delivered the verdict in response to a petition filed by Geomin Minerals and Marketing Pvt Ltd, one of the several companies that had applied for a share in the Khandadhar mines' resources.
Geomin had challenged the government decision, claiming that it had made the first application for a mining lease in the area in August 1991, which was not considered.
The high court had also directed the state government to dispose of all pending applications of the petitioner within four months.
POSCO signed a memorandum of understanding June 22, 2005, for a 12 million-tonne steel plant near the port town of Paradip, some 100 km from here, with an investment of $12 billion - the largest foreign direct investment in India.
The project, scheduled to be set up by 2016, has been delayed due to various fctors, including protests by local residents against acquisition of their lands.