The Hindu Business Line : Posco to pump in $50-m FDI

SOUTH Korean steel-maker Pohang Steel Company (Posco) is planning to pump in around $50 million in foreign direct investment (FDI) within the next few months, after which it would apply for prospecting licences for iron ore, the company's chief representative in India, Mr Sang Moo Doh, told Business Line.

"We have submitted our documents with the authorities of the Registrar of Companies (RoC) in Orissa for incorporating an Indian company. When we get the company we would be approaching our parent company for the funds. Once we have the funds we will be able to apply for the prospecting licence," Mr Doh said. The Indian subsidiary would be called Posco India Corporation.

Informed sources said that after this first tranche of $50 million, the second tranche of investment is likely to come in for developing the proposed port at Jatadhari in Orissa, but that would depend on the Korean company's progress in iron ore mining.

The company proposes to invest around $900 million for the port project.

The proposed port would be constructed in two phases. The first phase would involve an investment of $600 million, which will be distributed in two modules of $400 million and $200 million. In the second phase of the construction, the company would make an additional $300 million investments, according to officials.

Posco has recently signed a Memorandum of Agreement (MoU) with the Orissa Government for setting up a $12-billion steel plant in Orissa.

"We have given our proposal to the Orissa Government and now it is for them to decide. We have said that we will not export iron ore. They have offered us 600 million tonnes of iron ore for mining. If any major obstacle does not arise, we will complete the project by 2009," Mr Doh said.

Meanwhile, there was a furore in Parliament today following a calling attention motion moved by leaders of the Communist Party of India Marxist (CPM).

Replying to the calling attention motion, the Union Minister for Mines, Mr Sis Ram Ola, said that the Centre has not received any application from Posco and once that has been received, the proposal would be considered in detail before proceeding on it.

He also said that though prospective licences are granted by the respective state governments, since "iron ore is a scheduled mineral, prior approval of the Centre would be required".

"The Ministry of Mines will examine the proposal in detail, in accordance with law and in consultation with concerned ministries when an application is received duly forwarded by the State Government," he said.

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