New Delhi, Jan. 10: The government has granted environmental clearance to the much-delayed $12.6-billion steel plant of South Korea’s Posco in Odisha.
However, officials said a proposed port to feed the plant had not yet been cleared.
The crucial approval comes a week ahead of South Korean President Park Geun-hye’s visit to the country and a few days after the trip of Korean finance minister Hyun Oh-seok.
The Posco plant will be the single largest foreign direct investment in the country. Prime Minister Manmohan Singh is believed to be personally keen on getting the project off the ground at a time India is trying to build a strategic relationship with South Korea as part of its Look East policy.
In May last year, the project had moved a step forward with the Supreme Court ruling that it was for the Centre to decide whether iron ore mines in Khandadhar hills could be allotted to the steel maker. The apex court had quashed legal suits against the allocations.
The Posco plant will churn out 12 million tonnes of steel annually.
In its original investment application to the Centre, the company had sought and gained the right to export 30 per cent of the high grade iron ore it would mine in Odisha to its mother plant in Korea in exchange for lower grade ore.
Posco uses the Finex technology, which can use lower grade iron ore in steel making.
Critics maintain that the ore-swapping deal is meant to give raw material security to the mother plant.
India’s high grade iron ore reserves have attracted the interest of several global players. ArcelorMittal is keen to set up two plants in the country based on the mineral concessions they may win here.
Sources said Posco had been able to get possession of almost the entire 2,500 acres it needed to start the first phase of the project. The entire project requires 4,000 acres.