Posco plans to bring in $27bn more
This could well turn out to be the largest foreign direct investment proposal to India so far.
By Gunjan Pradhan Sinha & Subhash Narayan, TNN |
NEW DELHI: This could well turn out to be the largest foreign direct investment (FDI) proposal so far. Global steel major Posco is all set to bring in additional FDI of $27bn over the next seven years to set up more steel plants in Chattisgarh and Jharkhand. Posco has already committed $12bn for the 12m-tonne steel plant in Orissa. Put together, Posco’s investments would turn out to be more than India’s total FDI inflow since 1991, which stood at $38.9bn on March 31, ’06.
Posco officials have indicated their investment plans during the recent discussions with commerce ministry officials in Korea. “We have received assurances by the company for fresh investments of $27bn in the Indian steel sector over the next seven years,” senior officials of the commerce ministry said.
They added that new investments would mainly be for setting up steel plants in new locations, but the company would also develop infrastructure such as ports and roads, and also look at mining new iron ore sources in the country. A delegation from the ministry of commerce and industry was recently in Korea to explore the possibility of co-operation between the two countries, including identifying areas for fresh investments.
Though the MoU for the Orissa plant was signed in the second half of last year, Posco is still awaiting clearances for getting iron ore mining lease to support its steel plant. Moreover, the company is also facing problem in getting possession of land in the wake of mounting opposition from families that are likely to be displaced.
“The problems in Orissa have not disheartened Posco, and they are looking at reaping long-term benefits in the Indian market where steel sector presents tremendous potential,” government sources said. It’s likely that a final decision on new investments into the country would be taken by Posco after first phase of its Orissa project goes on stream some time by ’10.
However, groundwork for identifying locations for the new steel plants would start at the earliest. In all likelihood, Posco may zoom in on locations where the state government gives it an assurance on captive iron ore sources. For the Orissa project, the company is likely to get a lease for 600m tonnes of iron ore reserves.
When contacted, a senior Posco India official denied having information about fresh investment by its Korean parent. “We are looking at only Orissa project for now,” he said.
Posco’s move to step up Indian investments follows strong growth expected in the Indian market. Already global steel majors like Mittal Steel is looking at investment in the steel sector here. Other companies like Russian MMK, Nippon Steel and Bao Steel are exploring the market for possible future investments.
Posco officials have indicated their investment plans during the recent discussions with commerce ministry officials in Korea. “We have received assurances by the company for fresh investments of $27bn in the Indian steel sector over the next seven years,” senior officials of the commerce ministry said.
They added that new investments would mainly be for setting up steel plants in new locations, but the company would also develop infrastructure such as ports and roads, and also look at mining new iron ore sources in the country. A delegation from the ministry of commerce and industry was recently in Korea to explore the possibility of co-operation between the two countries, including identifying areas for fresh investments.
Though the MoU for the Orissa plant was signed in the second half of last year, Posco is still awaiting clearances for getting iron ore mining lease to support its steel plant. Moreover, the company is also facing problem in getting possession of land in the wake of mounting opposition from families that are likely to be displaced.
“The problems in Orissa have not disheartened Posco, and they are looking at reaping long-term benefits in the Indian market where steel sector presents tremendous potential,” government sources said. It’s likely that a final decision on new investments into the country would be taken by Posco after first phase of its Orissa project goes on stream some time by ’10.
However, groundwork for identifying locations for the new steel plants would start at the earliest. In all likelihood, Posco may zoom in on locations where the state government gives it an assurance on captive iron ore sources. For the Orissa project, the company is likely to get a lease for 600m tonnes of iron ore reserves.
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When contacted, a senior Posco India official denied having information about fresh investment by its Korean parent. “We are looking at only Orissa project for now,” he said.
Posco’s move to step up Indian investments follows strong growth expected in the Indian market. Already global steel majors like Mittal Steel is looking at investment in the steel sector here. Other companies like Russian MMK, Nippon Steel and Bao Steel are exploring the market for possible future investments.
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