Fresh snag hits Posco in Odisha

Firm won't be given mines on preferential basis

The Odisha government on Friday strongly disapproved of Union Steel and Mines Minister Narendra Tomar’s recent statement that South Korean steel major Posco would not be allotted iron ore mines on a preferential basis for its project in the state. 

Posco would have to participate in the bidding process to get access to the mines as per the recent ordinance promulgated by the Centre for distribution of mining lease. 

“We disapprove the minister’s statement. It will affect the country’s image in international forums as a commitment had already been made to Posco that they would be allotted an iron ore mine in Odisha,” said state Minister for Steel and Mines Prafulla Mallick. 

The Odisha government had recommended to the Centre to allot the iron ore mines in Khandadhar hills in tribal dominated Sundergarh district to Posco to generate raw materials for its 10 million tonne steel project in coastal Jagatsinghpur district.

The Centre later promulgated an ordinance to allot lease to companies for mining activities through auction route instead of the old practice of allotment on the basis of recommendations from the state governments.

After the ordinance came into effect, the Odisha government had reportedly approached the Centre to exempt Posco from the bidding process as the state government’s recommendation was already pending before it when the ordinance was promulgated. 

However, with the statement, the Union minister has made it clear that the Centre does not favour giving any concession to the steel firm.

Mallick further reminded that it was not only the state government but also the government of India which had made a commitment to South Korea to make ways for the smooth implementation of Posco’s Odisha project.

“I would like to remind you that Prime Minister Narendra Modi had also made a commitment on the Posco project during his South Korea visit,” Mallick said, indicating that the state would once again move the Centre on the issue.

Mallick’s statement has already triggered a war of words between the BJD government and the opposition BJP, with its state unit president K V Singhdeo accusing the state of trying to hide its failures with the issue.