Posco Plant Delay LikelyPublished by MAC on 2006-03-15
Source: Shanghai Daily ()
Posco plant delay likely
by Shanghai Daily
15th March 2006
POSCO, the world's fifth-largest steelmaker, said its planned US$12 billion plant in India may be delayed because it hasn't begun buying the land needed for the project, the biggest overseas investment in the country.
Posco's 12-million-metric-ton-a-year plant in Orissa, an eastern state that holds a quarter of India's untapped iron ore, needs 1,619 hectares of land. Posco is waiting for the Orissa government to help move the 200 families on the land to a new location, said Jeong Tae-Hyun, who heads the project.
Delays in allocating land may undermine India's efforts to win more investments, leaving the South Asian nation short of the raw materials needed for an economy forecast to grow at 8.1 percent this year.
Tata Steel Ltd, India's No. 2 steelmaker, in January halted work at its planned 6-million-ton plant in Orissa after a clash between villagers and the police killed 13 people.
"We're not willing to take any chances after what happened at the Tata Steel site," Jeong, managing director of Posco India, said yesteday in New Delhi. "The project has been delayed but we hope to keep it within the target schedule."
Posco in December said it expected to complete the first phase of the plant, allowing for annual output of 4 million tons, by December 2010.
Mittal Steel Co, the world's biggest steelmaker, and Posco plan to spend US$21 billion over the next seven years in India because of rising local demand and access to the world's sixth-largest iron ore reserves. Record steel production last year led to a 71.5 percent jump in iron ore prices.
Building steel mills and tapping iron ore deposits require relocation of villages and environmental permits.