Posco advised to source coal from free markets for Odisha project

NEW DELHI: The government has advised South Korean steel major Posco to source iron from the free market for its proposed plant in Odisha and not let allocation of a captive mine hold up project execution. This was communicated to Posco and South Korean officials during President Park Geun-Hye’s visit last month, according to officials in the ministry of external affairs. Prime Minister Manmohan Singh had then announced that work on the $12 billion steel mill would begin in the coming weeks.

The regime is keen that Posco should start sourcing iron from the free market as waiting for a captive mine would further delay the project.

Officials well versed with the project said it could take Posco 18 months to complete the plant. A senior Posco India executive, however, said that getting a captive mine is important for the company’s Odisha plan. “The captive mine is a core component of the Odisha project. It is one of the key incentives for us to set up a plant in Odisha, which does not offer other business incentives like Maharashtra or Gujarat. It depends on how you define ‘starting work’ too,” the executive, who did not wish to be named, told ET.