New Delhi, Jan 31 (IANS) The environment ministry Monday gave conditional clearance to South Korean steel major Posco's $12 billion project in Orissa, the biggest foreign direct investment in the country.

Posco is an integrated steel, mining and port project and separate clearance had to be given to all three. It also comprises a captive power plant to provide electricity to the steel plant.

The ministry has imposed 28 additional conditions as part of the environmental clearance for the steel-cum-captive power plant and 32 conditions are imposed while according environmental clearance to the captive minor port in the state.

On the issue of transfer of land for the project, coming up in Jagatsinghpur district, about 100 km from the state capital Bhubaneswar, the ministry has asked the state government to provide a comprehensive package to forest dwellers in the area.

"Undoubtedly, projects like Posco have considerable economic, technological and strategic significance for the country but at the same time, laws on environment and forests must be implemented," said Environment Minister Jairam Ramesh.

The environment ministry had put the project on hold, citing violations of environment and forest laws by the company.

Posco requires about 4,004 acres, mostly government land, for its project. Of the land earmarked, 2,900 acres is forest land.

Thousands of villagers have been opposing the project, saying it will displace them from their homelands and ruin their betel leaf farms.

Posco and the state government, however, maintain the project will bring prosperity and employment to the impoverished region.

The National Forum of Forest People and Forest Workers (NFFPFW) claimed that POSCO 'deliberately unbundled' the project - steel plant, captive port, power complex - into smaller parts and sought environment clearances for each independent part, even though they were all components of one project and located within one complex.