Why did POSCO decide to make comeback to Odisha & set up steel plant with JSW in Keonjhar?

In a joint venture, South Korean steel giant POSCO along with JSW Group will set up a mega steel plant in Keonjhar. Chief Minister Mohan Majhi has recently cleared the air in this regard. Now, speculation is rife on why POSCO decided to set up the steel plant in the State in a joint venture with JSW though the company had withdrawn from its previous project in Odisha in 2017 following controversy over land acquisition and some other issues.

Earlier in 2005, POSCO had come to Odisha in a bid to set up a mega steel plant in Jagatsinghpur district with the highest amount of Foreign Direct Investment (FDI) in India. Had everything gone well, a mega steel plant with a production capacity of 12 million tonnes per annum (MTPA) would have been established in the State. However, the company failed in its effort due to several reasons despite trying hard for 12 long years.

The South Korean company is making a comeback to Odisha again in a joint venture with JSW this time. Meanwhile, discussions are doing the round that when POSCO was once interested in investing alone in the State, why did the steel giant choose to sign an MOU for a joint venture with JSW?

As per industrial experts, land acquisition was not possible to set up the plant in Jagatsinghpur due to massive protest by the locals. Moreover, POSCO didn’t have also mines to run the steel plant. However, the situation has been changed drastically. The Odisha government has identified two places for establishing the plant in Keonjhar. Even, JSW has four steel mines in the State to cater to the need of the raw material of the proposed plant. It could be one of the reasons why POSCO decided to set up a plant in a joint venture with JSW.

“Odisha government has been identifying proposed places for the mega steel plant. Earlier, there were problems with mines. However, JSW has currently four iron ore mines. If the project is set up, they may take more mines in auction. It will be a win-win situation for the State,” said Utkal Chamber Of Commerce & Industry (UCCI) president Prabodh Mohanty.

Several people are also intrigued by the question as to why POSCO chose Keonjhar to establish the plant. As per the industrial and economic experts, the maximum amount of iron ores is available in Keonjhar. Currently mining activities are going on in as many as 36 iron ore and manganese ore mines. Moreover, JSW has Jajang iron mine located in Joda. Not a single mega industry has been set up in Keonjhar as yet. Hence, considering these advantages, there is a great opportunity to set up the mega steel plant in the district.

While a four-lane road is connecting Keonjhar to Paradip port, it has already been announced that the road will soon be expanded to an eight-lane one. As a result, it will be very much conducive to transporting goods through the expanded road. CM Majhi is also eager to set up the steel plant in his home district as it will provide employment to the local people and boost the economic development in the area and the whole State.

Under the circumstances, there is less chance that POSCO will fail again in setting up a mega steel plant in Odisha.

“There are sufficient deposits of iron ores in Keonjhar district. However, a mega steel plant is yet to be established in the district. Now a great opportunity has come. It will create employment opportunities and value addition. The economic condition of the district and the whole State will prosper in the process,” said economic expert Rajiv Sahu.