POSCO scraps proposed 6-MT steel project in Karnataka
Bhubaneswar: Less than a fortnight after the Odisha government announced the completion of land acquisition process for Posco’s proposed 8 million tonnes per annum (MTPA) greenfield steel project in Jagatsinghpur district, the South Korean steel behemoth on Tuesday declared it would scrap the proposed 6 million tonnes steel plant in Karnataka, following long delay in land acquisition and adverse market conditions.
"With the given market conditions and significant delay in acquiring the required land in Gadag, we have decided to close our proposed 6-MTPA steel plant in Karnataka," POSCO India Chairman and Managing Director Yong Won Yoon said in a statement.
"In future, if we get an attractive business proposal from the state, we may consider it and return to Karnataka," Yoon stated.
In June 2010, POSCO had signed an MoU with the Karnataka government at a Global Investors Meet in Bengaluru to set up a steel plant with annual production capacity of 6 million tonnes in the state, the company statement said.
Subsequently in January 2011, the company finally zeroed in on Gadag to set up the proposed steel plant and notified Karnataka Industrial Area Development Board (KIADB) accordingly, it said.
The progress on land acquisition was held back due to agitation by some farmers and religious leaders and finally, land acquisition was halted in July, 2011. In addition, the mining scam in the state made the project progress even "stagnant", the statement said.
Hence, considering the "significant delay" in the project and inability to get land in Gadag, POSCO finally decided to close the project in Karnataka.
On July 4, the Odisha government had announced the completion of land acquisition for the company’s proposed steel plant. Posco-India required 2,700 acres of land to establish an eight-million tonne per annum-capacity plant.
According to officials, the Odisha Industrial Infrastructure Development Corporation (IDCO) has already handed over 1,703 acres to Posco-India. The remaining land will be transferred to the company in due course, officials said.