Home BIG STORY MoEF clearance not to end Posco’s woes

MoEF clearance not to end Posco’s woes


Reported by Chinmaya Dehury

Bhubaneswar, Jan 10:

Even though the Environment Ministry has given its go-ahead to Posco India’s $12.6 billion steel plant project in Jagatsinghpur district, the South Korean company has a couple of major hurdles to cross.

Firstly, the steel major is yet to get the nod for its proposed captive port at the Jatadhar river mouth. The company considers the port a crucial and a non-negotiable component of their steel project and may not make any big investment unless that is in its kitty, sources said.posco

The second crucial gap is the lack of an assured source of raw material. The Khandadhar mines in Sundargarh distrct, which is supposed to cater to the iron ore requirements of the plant is still hanging fire.

Observers say the Posco project is the perfect example of a jinxed project. It has been stuck for more than eight years due to delays in getting various clearances and faced stiff resistance from the local people who want the project shifted to an alternative site.

It is not accidental that the five-year conditional revalidation of the South Korean firm’s lapsed environmental clearance comes days before the country’s president, Park Geun-hye visits India for four days starting January 15. The South Korean government has gone out of its way to lobby for the Posco project, touted as the biggest Foreign Direct Investment ( FDI) in India and the Manmohan Singh government too, on its part, promised total support to the project several times over the past five years.

Reliable sources said the green nod came after South Korea’s ambassador to India called on Minister for Environment and Forest Veerappa Moily last week and suggested that the plant and port projects be delinked in respect of clearances.

The move followed the realisation  that insistence on clearances for both the steel plant and captive port was asking for too much too soon.

“ The idea is to put the steel plant project over and above everything else. Once the project comes up, we will follow up on the port,” a source in Posco India revealed.

On the captive mines front, the South Korean major has little to cheer about. The state government has been sitting over the matter for months and not sent any response to the Centre towards the grant of prospecting license (PL) for Khandadhar mines in favour of Posco.

It is to be noted that the Centre had sought certain clarifications including lease mapping of the mines area along with the recommendation of state government to grant PL for the company.

“We will reply within a day or two to the Mines ministry on granting an iron ore exploration licence to Posco,” said Director of Mines Deepak Mohanty.

Posco Boundary wall construction halted (Pic :   Binay Ray)
Posco Boundary wall construction halted (Pic : Binay Ray)

The Supreme Court of India while setting aside the Odisha High Court order on Khandadhar mines, had asked the Centre to take a final decision on allotment of the said mines in May last year.

The Odisha government had first recommended the grant of PL to Posco India to the government of India in 2006. The Centre had returned the recommendation back to the state government in the same year and directed it to conduct hearing of all the applicants for Khandadhar mines and submit its recommendation again.

The state government then took two and half years to complete the hearing of all the applicants and  recommended the same in favour of Posco to the Centre once again in 2009. As per the procedures under MMDR Act, it was to be reviewed and approved by the Central government. But that has not happened because certain clarifications are to be sent by the state government.

Moreover, the recent Supreme Court ruling on Vedanta’s bauxite mining project in Niyamgiri hills will pose a major challenge for Posco when it finally manages to lay claim over Khandadhar mines. Since the local tribals are opposed to mining here , the matter may be referred to the Gram Sabhas of the tribal villages situated in and around the hill.

Protests by Pauri Bhuiya, a primitive tribal group that lives around the Khandadhar hills, concerns of civil society that mining activity leading to drying up of water sources could strengthen the political opposition may frustrate Posco’s paln to acquire the ‘mining jackpot’.

The Forest Rights Act and Gram Sabhas will come into play to decide the fate of the mining, which will take at least two years, said a knowledgeable source.

Khandadhar Water fall ( pic-wikipedia)
Khandadhar Water fall ( pic-wikipedia)

Besides, the Khandadhar region is known for its rich biodiversity and that explains why green activists are up in arms against mining operations in the area.

“The area is full of rich biodiversity. The water flow will be disrupted if mining is allowed there. Besides, allowing mining on a huge scale will upset the region’s overall ecological balance. It should not be mined at all and preserved as it is,” said Biswajit Mohanty, the well-known green activist.

Observers say gaining access to Khandadhar may turn out to be a tougher battle than what the company confronts at its project site. For, the whole spectrum of political forces- from the BJP to the Maoists- appear united against mining of iron ore in Khandadhar.

Perhaps these obvious complications have been taken into account in the MoEF order. While granting environment clearance to Posco, the order says the company will source minerals through Odisha Mining Corporation or other private miners to run the steel plant.

“Till the time captive mine is ready, Posco will make a long term agreement with OMC and other private mine owners for the iron ore,” said the letter of MoEF addressed to Posco India.

When it signed an MoU with Odisha government in June 2005, POSCO wanted 4,004 acres of land to set up its plant. It has already been allotted about 2,700 acres to begin work on the project’s first stage, which involves setting up two 4-million-tonne plants in two phases. But much of the work can begin only after a nod from National Green Tribunal (NGT), which in May put on hold felling of trees for the project.

The next hearing in this case may come up on January 13.

While the NGT decides things,  the ongoing people’s resistance to the proposed plant area will keep troubling the company and cause further delay. The boundary wall construction at the proposed area has been halted following opposition from the local people including those who support the project. This being an election year, the company is also not likely to get the active support of the state government while dealing with public resistance.

So, as an observer aptly put it, Posco’s cup of woes will continue to overflow… for quite a while.


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