| The Posco plant in South Korea.
Bhubaneswar, Dec. 14: Hemmed in by local farmers and activists like Medha Patkar over its proposed 12-million-tonne steel plant at Jagatsinghpur, South Korean steelmaker Posco now has reasons to smile after the Orissa government finally recommended the grant of lease to the company for prospecting iron ore.
The state government recommended the application for prospecting Khandadhar mines deposit in tribal-dominated Sundargarh district to the Union mines ministry on December 8.
The recommendation came four days before Posco CEO Ku-Taek Lee met chief minister Naveen Patnaik.
The lease would be given under the Mines and Minerals Development and Regulation Act, 1957.
Govt officials said the recommendation for PL was made to send the signal that the government was serious about the project despite teething problems in land acquisition.
“We have just recommended it. The mines ministry will take the final decision,” steel and mines secretary L.N. Gupta said.
Posco, which is facing protests over land acquisition, from local farmers in Jagatsinghpur district, had applied for prospecting lease for three mines in Keonjhar and Sundargarh districts in September last year. But the state government kept the file pending and instead asked the company to acquire the land first and think about mining lease later.
Once the mines ministry approves the state government’s proposal for reconnaissance or prospecting of iron ore, the company would start its operation in the Khandadhar mines deposit to estimate the amount of ore available.
Posco spokesperson Sashanka Patnaik said the Orissa government recommended prospecting lease over an area of 6,204 hectares. In June this year the company had issued a veiled threat to the state that it might pull out of Orissa if it did not get the lease for the captive mines assured to it.
The MoU signed last year with the state government assured Posco of mining lease of 600 million tonne of iron ore over 30 years.
The company submitted its application for prospective licence, the precursor to mining lease, in September last year to the Orissa government. But the government wanted to wait for the final report of the Anwarul Hoda committee, which will decide the allocation of captive mines to steel-makers and help formulate a new mining policy.