POSCO will now concentrate on its main steel project in Odisha
POSCO, a South Korea based steel maker, said on Tuesday, July 16, 2013, that it will withdraw its US$ 5.3 bn worth steel mill project from Karnataka. However, it will continue with its bigger project worth US$ 12 bn in Odisha, which is considered to be as India’s largest Foreign Direct Investment (FDI).
POSCO has cancelled the project because they are not getting the rights to commission with the iron ore mines within the expected time. Also, they are being opposed by the residents of the land, on which they had planned to set up their project. This step taken by POSCO will provide additional benefit to its main steel project in Odisha. The Odisha project, which is already running late by years, has recently gained some momentum after they got a clearance of legal obstacles for iron ore exploration license.
Kim Ji-young, a spokeswoman from POSCO, said that the company will proceed with the steel mill project of Odisha, which is in progress at present. The cancellation of Karnataka project will help the company to focus upon the Odisha project with more concentration, she added.
POSCO is the world’s fifth largest steelmaker. It had pursued plans for three steel mills in India as it wanted to hedge its bets on the slow moving Odisha project. POSCO had signed a preliminary agreement with the Karnataka state government in 2010, to construct a steel mill with a capacity of 6 MnTPA. Also, in 2009, it had signed a separate steel mill deal with Steel Authority of India (SAIL), a state owned steel mill of India.
Yong Won Yoon, CMD, POSCO India, said, ”With the given market conditions and significant delay in acquiring the required land in Gadag, we have decided to close our proposed 6 MnTPA steel plant in Karnataka. We highly appreciate the Industries Department (Government of Karnataka) and KIADB (Karnataka Industrial Area Development Board (KIADB) for their co-operation and cordial support in this regard. In future, if we get an attractive business proposal from the state, we may consider it and return to Karnataka.”