India approves South Korea's $12 billion steel plant

[News_Editor]

India approves South Korea's $12 billion steel plant

2011-01-31 23:51:57 GMT+7 (ICT)

NEW DELHI, INDIA (BNO NEWS) -- India's Environment Ministry on Monday approved a $12 billion steel plant project from South Korea, the biggest foreign investment in Indian history, the Times of India newspaper reported.

The project was approved after several setbacks from Environment Minister Jairam Ramesh. The plan was designed by the South Korea's Pohang Steel Company (Posco). Ramesh also blocked other projects and was accused of impeding India's growth.

The approval is subjected to Posco's meeting a series of environmental standards and will be India's biggest foreign direct investment as it will have considerable economic, technological and strategic impact in India.

The Environment Ministry imposed 28 conditions on Posco's steel-cum-captive power plant project. In addition, 32 more conditions on a captive minor port which is part of the project.

The steel mill will be located in 1,253 hectares of forest in Orissa. The project was delayed due to claims that the Posco project will ruin the lives of thousands of people living in poverty and depending on the betel leaf plantations of the forest.

Local farmers protested against the project. A government panel was established to address the concerns but it ruled that the final decision had to be taken by Ramesh as no ecological issues were found.

Ramesh also asked Orissa government to implement laws on environment and forests and assure that the farmers living in the Posco project area do not belong to the other traditional forest dwellers (OTFD) category under the 2006 Forest Rights Act.

In August 2010, the Environment Ministry ordered the Orissa government to stop selling land to steel giant Posco as the purchases were in violation of act as reported by a three-member committee set up by the Environment and Tribal Affairs Ministries.

The project was first announced in 2005 after India and Posco signed a Memorandum of Understanding for the establishment of an integrated steel plant of a total capacity of 12 million tons on June 22.

The plant will be located on the north-western bank of the Jatadharmohan river creek, 12 kilometers south of the Paradeep Port in Jagatsinghpur district. The steel mill will impact eight villages in Erasama block of Kujang Tehsil.

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