Mining lease, land acquisition hurdles threaten Posco’s India project – report

MUMBAI — (Thomson Financial delivered by Newstex) — Korean steelmaker Posco (NYSE:PKX) said it makes no business sense to go ahead with its 12-bln usd project in India without a mining lease, according to a report in the Financial Express.

Talking about the project, to be based in India’s eastern state of Orissa, Posco’s India chief Soung-sik Cho told the daily: ‘It is not likely to happen. Without mines, there is no reason to come to India, and it is not a viable proposition to set up a plant here then.’
The report quoted Cho as saying a constant supply of iron ore is important to compensate for problems such as poor infrastructure, communication, power and land acquisition.

The 4,000-acre land acquisition for Posco’s Special Economic Zone (SEZ) has run into trouble with villagers refusing to sell their land, the report said.

In the neighbouring state of West Bengal violence erupted last year over land acquisitions, making officials in Orissa wary of similar repercussions, the report added.

The daily quoted Cho as saying: ‘The politically biased society here is posing lots of hurdles in setting up the steel plant and has resulted in a delay of more than a year.’
But the daily quoted Cho as saying Posco would not withdraw from India’s biggest foreign direct investment project ‘unless asked to leave’.

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