POSCO scraps $5.3 billion steel project in Karnataka

Company will pursue its US $12 billion proposed steel project in Odisha

 
By M Suchitra
Last Updated: Saturday 04 July 2015

Facing strong resistance from farmers and subsequent delays in land acquisition, South Korean steel giant POSCO has decided to scrap its proposed $5.3 billion (Rs 30,000 crore) steel project in Karnataka.

POSCO signed a memorandum of understanding (MoU) with the Karnataka government in June 2010 for setting up a steel plant with a production capacity of six million tonnes a year (6MTPA). The agreement was signed while B S Yeddyurappa was the chief minister of the state; he was forced to quit office in August, 2011 after the Bellary iron ore mining scam. The proposed site was in Mundargai taluk of Gadag district, close to iron-rich belt of Bellary.

Besides opposition from the local communities, the project did not move forward due to the iron ore mining scam. The land acquisition process was stopped in July, 2011.

"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 chairperson and managing director Yong Won Yoon said in a statement.

The company has made it clear that it would come back to Karnataka if it gets any good offer from the state government. "In future, if we get an attractive business proposal from the state, we may consider it and return to Karnataka," says the statement.

POSCO has however decided to continue pursuing its $ 12 billion steel project in Odisha, which was originally proposed in 2006 and has yet to take off the ground  because of local resistance and fresh terms set out by the Centre.

Tags: POSCO steel project in Karnataka,  Bellary iron ore mining scam,  POSCO India chairperson and managing director Yong Won Yoon, POSCO steel project in Odisha


 

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