The Hindu Business Line : Posco may relocate steel project if Orissa deal fails

KOREAN steel major Posco may reconsider its decision of setting up a 10-million tonnes (mt) per annum steel plant in Orissa, if the State Government further delays in giving the necessary clearances. This was stated by Mr Chang-Oh Kang, President of Posco, after addressing the Metals 2004 seminar organised by the Bengal Chamber of Commerce and Industry here on Thursday.

Mr Kang said that the Orissa Government had set up a special working group, which is currently studying Posco's investment proposal. "However, we are yet to hear anything from the Orissa Government," Mr Kang told reporters on the sidelines of the seminar.

When asked whether Posco would consider shifting the project from Orissa in case of an inordinate delay, Mr Kang said: "Let's see how things progress. We will think about a second line of action only if the talks fail."

The Korean steel major, which is the fifth largest steel producer in the world, may consider setting up its proposed steel plant in any other State, which is rich in iron ore and coal, if Orissa fails to provide the required infrastructure for the plant.

Industry sources said that if Orissa failed to strike a deal with Posco, then West Bengal would possibly be their second preferred location. "The West Bengal Government is closely following the developments and they may pitch in, once situation become favourable for the Koreans," the sources said.

Four months ago, Posco had written a letter to the Orissa Government expressing its interest in developing mining facilities and setting up a steel plant. It has already tied up with the Australian major BHP-Billiton for the project.

Initially, the Korean company had planned to set up a 3-mt plant, but later the capacity was raised to 10 mt. The total investment in the project would be $8.4 billion. Posco was established in 1968 and privatised in 2000. Its total crude steel production is 30 mt.

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