Bhubaneswar, Dec. 9: The state government continues to be hopeful that the South Korean steel giant Posco will set up its the eight-million-tonne plant in Paradip.

Steel and mines minister Prafulla Mallick today told the Assembly: "The Posco authority has not yet informed the government about its decision to withdraw from the project. We have not even thought of handing over the land already acquired for the Posco project in Jagatsinghpur district to any other industrial house."

The company had sought 2,700 acres for the project. "Idco has handed over 1,880.110 acres, and the process is on to hand it over the remaining land," he said.

The steel major lost its interest in the project after the Centre had brought in the new mining policy, under which mines would be allocated through auctions and not be allocated.

When Posco entered into an MoU with the state government in June 2005, the state had a say in mine allocation although the Centre used to formally allocate mines to the industries.

Though the state government had initially allocated the Khandadhar mines to Posco, the allocation got embroiled in the legal dispute. With change in the Mines and Minerals Development and Regulation Act, 1957, being changed in 2015, the steel major developed cold feet.

In a related development, the minister, attending the Associated Chambers of Commerce and Industry of India's steel summit held here, said the state was taking steps to extend the lease validity of more mines according to legal provisions.

Mallick said: "The validity of lease period has already been extended in case of 82 mining cases, including 55 iron ore producing leases, according to the amended provisions of sections 8A (5) and 8A (6) of the act," said Mallik.

The state is worried about loss of revenue from the mining sector and wants more mines to start operating with lease renewal. While in 2013-14, the state had targeted to collect revenue of Rs 6,600 crore, it managed to mop up Rs 5,518.80 crore. In 2014-15, it had collected Rs 5,310 crore and fell short of the target of Rs 6,346.98 crore. In 2015-16, the state had aimed to collect Rs 6,626 crore, but collected only Rs 5,797.80 crore.

The minister also said coking coal reserves available in the country had high ash content and were thus not fully suitable for making iron. "Efforts should be made to use indigenous wash coal to bring down the costs of production as well as research and development support without compromising with quality," he said.

Highlighting the poor per capita steel consumption in the rural sector, Mallik said there was a need to thrust upon infrastructure and automobile sectors that were amid largest consumers of steel. "Rise in demand from these sectors will help in augmentation of steel production, which will help in capacity utilisation of the existing facilities and bring down the production cost," he said.

The minister also said efforts should be made to encourage small and medium scale steel manufacturing in India. Mallik said training should be imparted to the rural populace to work in the steel sector, besides a refserach and development initiative should be undertaken to provide machinery in these areas at affordable costs. "There is a need to ensure availability of raw material at a competitive price to realise the advantage of Indian steel sector," said D.S. Rawat, secretary general, Assocham.