With the new BJP government in the saddle in India, the one question that everybody in the steel sector is asking these days is – what about the POSCO project?
From its inception in 2005, the South Korean steel major’s US $12 billion project has been under intense international scrutiny. Slated to come up in India’s eastern province of Odisha, it is the single-largest Foreign Direct Investment (FDI) project India’s ever had.
POSCO, a South Korean steel conglomerate, signed a memorandum of understanding in June 2005 with the state government of Odisha to construct a $12 billion steel plant with its own iron ore mining operation.
In the 11 years since POSCO’s Indian journey has been full of protests by local tribes, violence and a kind-of-a-political tango between the central and provincial governments, and except for some paperwork, nothing on the ground has moved. At all. The previous Indian government, led by former Prime Minister Manmohan Singh, may have been in favor of pushing through the project but now that the Bharatiya Janata Party (BJP)-led government’s taken over, will it approve the license to prospect for ore?
The Modi Government is perceived to be a largely FDI-friendly government, and logic dictates that it will tilt in favor of POSCO. A statement, though, by Jual Oram, a high profile BJP politician from Odisha, who was recently elected and is now part of the government, clearly shows that the end may still not be in sight for POSCO.
Oram, who is now India’s Tribal Minister, has said his ministry would work on more than just “development” and (will) “have a far greater say in the country’s affairs to protect the interests of India’s tribal population.”
A report in The Economic Times quoting Oram, said this member of Parliament is clear he will oppose POSCO’s mining/steel project, which incidentally falls in his parliamentary constituency, Sundargarh. Not only that, he also told the newspaper that he would be apprising Prime Minister Narendra Modi of the pitfalls of mining in the region. Without the iron ore from these mines, the POSCO project will go nowhere.