Bangalore, June 4 (IANS): Korean steel major Posco has signed an agreement with the Karnataka government to set up a six million tonnes steel plant in the state, Major Industries Minister Murugesh R.Nirani said here late Thursday.
"Posco officials have signed a memorandum of understanding (MoU) with the state government to set up a steel plant in the state at a cost of Rs.30,000 crore (Rs.300 billion/$6.4 billion) without insisting on captive mines," Nirani told IANS on the margins of the second Global Investors Meet (GIM 2010).
Posco is the second global major to enter Karnataka after the world's largest steelmaker ArcelorMittal signed a similar agreement to set up a six million tonnes per annum plant in the state for the same investment (Rs. 300 billion).
"Though Posco earlier insisted in writing for captive mines, land, water and power before clearing its project, it relented after we prevailed on it to first sign the agreement on the terms and conditions that were applied to ArcelorMittal and other steel firms," Nirani clarified.
As in the case of ArcelorMittal in Jharkhand and Orissa, Posco too has been facing opposition to its 12-million tonnes per annum steel plant in Orissa's Jagatsinghpur district over the last five years due to stiff opposition from farmers and locals on acquiring their fertile lands.
"We have explained to Posco officials that as per our revised mining policy, captive mines will be allotted only if a steel plant is set up in the state. Under the Indian Mining Act, it is the central government which has to grant license to captive mines. We are ready to recommend Posco as we have done in the case of ArcelorMittal and other steel firms," Nirani said.
Posco, however, will be allocated land in Bagalkote district of north Karnataka, with water supplied from the Almatti dam across the Krishna river to set up its steel plant in five years.
"As we have already allocated about 4,000 acres of land in Bellary district to ArcelorMittal and are in the process of allocating land for other firms setting up smaller steel plants, we have told Posco to locate its greenfield plant in Bagalkote district," Nirani added.