Odisha supports POSCO in obtaining a license

The Odisha state government wants the central government to grant South Korean POSCO a license to explore for iron ore and develop steel capacity in Odisha, which is being hindered by a new law that provides for an auction for all mines that open.

The law, passed by Indian Prime Minister Narendra Modi, aimed at reducing corruption, however, led to huge complications for POSCO, which expected the Indian government to transfer a mining license to the company without any competition.

The company has yet to start work on the construction of a 12mtpa steel plant due to strong opposition to the acquisition of the land and delays in approving the acquisition of an iron ore mine, a key raw material for steelmaking.

The Odisha state government has already sent letters to the central government recommending that it secure a POSCO license that would lead to the largest foreign direct investment in the country. But the central government has yet to make a decision on the request sent by the state government. Minister Odisha Mines told reporters that the company should be granted a mining license based on recommendations made by the state government.

However, the Central Ministry of Mines and Steel said it did not provide any comments on any of the bidding companies. A POSCO spokesman said the company is still conducting an executive study, but has no clarity on the matter.