Bhubaneswar, Aug. 10: The decks seem to have been cleared for the renewal of Orissa government’s MoU with South Korean major, Posco for the company’s 12 million tonne proposed steel project in Jagatsinghpur district.

Sources said Posco officials have given up their insistence on the swapping of iron ore, which was part of the original MoU signed in 2005 and also agreed to provide employment to the locals, a demand that the state government had made to the company. The company has also agreed to construct a jetty for the local fishermen and provide mechanised boats to them. Steel and mines minister Raghunath Mohanty said: “They have submitted the proposal and accepted some of our suggestions. They want certain modifications.”

Under the swapping clause, which was part of the original MoU, the company was allowed to import 30 per cent of iron ore with low alumina content from other countries in exchange for equal amount of ore from the state.

Sources said Posco now wants permission to import high-grade iron without exporting an equivalent amount from the state.

“They need high quality of iron ore with less alumina content. We don’t have any objection to that. It will improve the quality of the finished product. The company has suggested that Orissa Mining Corporation (OMC) could help them in this regard,” said a senior official of the government closely associated with the project.

Chief secretary Bijay Patnaik said: “We are in the advance stages of discussions preparatory to the renewal of the MoU. The proposal submitted by Posco is being examined now.” Officials said that only by renewing the MoU, Posco could win the confidence of bankers.

However, even the sourcing of iron ore is going to be a problem for the company considering that the government’s recommendation in its favour for the allotment of Khandadhar mines has been rejected twice. Sources said the issue was being given a fresh look by the company.

Sources said the state government’s demand for recruiting local youth for the project in Jagatsinghpur has also been accepted by the company. The government wants the company to reserve 90 per cent of jobs for unskilled and semi-skilled local youth, 60 per cent for skilled people and 30 per cent at the supervisory managerial level from among them.