In a move that threatens to curtail Korean steel giant’s investment in India, the Korean firm, Posco, said the Indian Federal government instructed the Orissa state government to halt land acquisition for the company’s proposed steel manufacturing plant in Orissa. The move by the Indian government threatens the $12 billion proposed steel plant construction Posco had planned to undertake in the Orissa state.
It is believed, according to the company, that the Indian Ministry of Environment was behind the move that saw the Orissa state halt land acquisitions from farmers in the state for the plant. However, the move by the Environment Ministry comes amidst reports by a non-governmental organization detailing the land situation in the Orissa state.
According to the report, more native residents inhabit forest land that had been thought before. In that regard, the ministry plans to undertake a census for itself over the number of households affected to ascertain the Orissa government’s number. The South Korean steel giant is proposing to undertake an investment that is currently considered as the single, biggest foreign investment in the country’s history.
However, the proposal has faced delays from 2005 due to opposition from farmers refusing to vacate their land and livelihood. Posco is not alone in this challenge, other steel giants in the country such as ArcellorMittal that had planned to establish a plant in Orissa and Jharkaland at an estimated $10 billion each were thwarted by uncooperative farmers.
Even so, Posco reiterated that the delays in land acquisitions are only minor hurdles that have been brought about by delays in administrative procedures and will not stand in the way of the project. Posco shares declined by about 0.8% to close at 512,000 won in Seoul trading after the latest announcement. The Indian Environment Minister, Jairam Ramesh, said that the Orissa state government did not conclude the process of identifying the land dwellers and thus new evidence is emerging that additional natives are dependent on the forest for their livelihood.
To cap it up, Ramesh added that any activity as regards Posco’s project, inclusive of what was commenced on the 27th of July violates the Country’s Forestry Acts. The Minister referred to the findings of the committee appointed by the Ministry to analyse the effects the proposed steel manufacturing plant would have on the residents of the state.
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