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Centre for auction route for Posco, rejects Odisha government's request

The Odisha government had recommended prospecting license in favour of Posco over the Khandadhar iron ore reserve.

twitter-logoPTI | April 10, 2015 | Updated 14:05 IST
Centre rejects Odisha's request, for auction route for Posco
(Photo: Reuters)

The Centre has rejected the Odisha government's request to consider its recommendation of granting prospecting license (PL) over Khandadhar iron ore reserve in favour of Posco India which proposed to set up a Rs 52,000 crore steel facility near Paradip.

"We had requested the Centre to consider our PL recommendation in favour of Posco as a special case since international commitment is linked with the project. However, they (Centre) now say that Posco too has to come under the auction route in order to get raw material linkage," Odisha Steel and Mines minister Prafulla Kumar Mallick told reporters.

Earlier, the state government had recommended PL in favour of Posco over the Khandadhar iron ore reserve.

"As the state government had made recommendation in favour of Posco much before the passing of the MMDR (amendment) Act, we expected that the Centre would consider it," the minister said.

Asked whether the state government would make a fresh request to the Centre to reconsider its decision, the minister said it would take a call on the matter after discussing the Centres response.

The state government for the first time had recommended in favour of Posco to get PL over Khandadhar reserve way back in 2006.

However, the Centre rejecting the state government's request in regard to considering Posco case separately, has made it clear that the South Korean Steel major has no alternative than participating in the open bidding.

Union Steel and Mines Minister Narendra Singh Tomar in a letter to Chief Minister Naveen Patnaik, has informed that the Posco application for Khandadhar iron ore mines has become ineligible under the new MMDR Act.

Tomar also informed the chief minister that facilitation of a steel project by Posco can only be done within the ambit of prevailing act and rules.

Earlier while visiting Rourkela, Tomar had made it clear that Posco cannot get the special attetion while granting raw material linkage.

"Even I will have to bid to get a mining lease," Tomar had said while responding to a specific query on Posco.

Posco, earlier in its MoU in 2005, was promised the Khandadhar iron ore mine by the state or its mega steel plant.

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