Posco plans to set up plant in Karnataka

BANGALORE: Just a day after the environment ministry granted conditional clearance to Posco for its $12-billion Orissa steel project, the South Korean steel major has reaffirmed its India plans with a second proposal.

Posco has selected Halligudi in Gadag district of Karnataka to build its proposed six million tonnes plant at an estimated investment of about 32,000 crore, according to V P Baligar, Karnataka principal secretary (commerce and industries).

Besides Posco, other firms that have plans to set up their steel mill in the state include ArcelorMittal, Bhushan Steel, Essar and NMDC.

Posco has sought 3,000 acres for setting up the plant and has already made the initial deposit with the Karnataka Industrial Development Board towards acquisition of land. The state government will now begin the land acquisition process, said Baligar.

Posco has already applied for a captive iron ore mining lease with the state government inviting bids for fresh licences.

Karnataka has been positive in encouraging steel companies to build their presence in the state. For companies that have already given indications of a plant, the government has assured companies of meeting at least 30-35% of their requirement for captive iron ore mining leases.

In the new mineral policy, the government has clearly stated that fresh mining leases will be given to those entities that are engaged in value addition.