Posco's proposed steel project in Orissa received a final clearance on Monday after a wait of almost six years.
The Environment Minister, Mr Jairam Ramesh, gave final approval to the Orissa Government for diversion of 1,253 hectares of forest land in favour of Posco.
Posco's plans to build a 12 million tonne per annum (mtpa) steel plant at an investment of $12 billion or Rs 53,000 crore at Jagatsinghpur district. This will make it India's biggest foreign direct investment project. A conditional environmental clearance was granted by Mr Ramesh for the first phase of 4 mtpa project in January.
Granting the forest approval on Monday, Mr Ramesh said Posco would bear the cost of regenerating forest in an equivalent extent of open, degraded forest land in a district to be determined by the Orissa Government. This is in addition to the conditions already imposed on compensatory afforestation.
Further, Mr Ramesh expects the South Korean steel maker not to export iron ore from the State. The earlier agreement between Orissa and Posco, that expired last year, had a provision for export of iron ore, “which made me deeply uncomfortable with this project”, he said.
“I would expect that the revised MoU between the State and Posco would be negotiated in such a manner that exports of raw material are completely avoided,” he said.
Posco welcomed the forest clearance to its much delayed project. The Orissa Government and Posco had signed an agreement for the project in 2005. The integrated steel plant included a captive power plant and a captive minor port. The entire project complex requires about 1,621 hectares of which 1,253 hectares were forest land.
“We are fully committed to the project. Once the land acquisition is complete by the State Government, we will move ahead with the project,” said Mr Vikash Sharan, Posco India spokesperson.
Mr Ramesh, who toured Orissa last week, said he was granting forest clearance based on the “faith and trust” in what the State Government had categorically asserted. The Orissa Government, in its latest missive to Mr Ramesh, had contended that the “two supposed palli sabha resolutions” — village committee resolutions — that the Environment Minister had received from Posco Pratirodh Sangram Committee, a body opposing the project, were fake.