Police Fire on Farmers Protesting Land Acquisition for Posco Steel Project

Posco’s plan to set up a $12 billion steel plant in India received a setback after police opened fire on local farmers protesting the government’s move to acquire agricultural land for the project.

Thirty people were injured on May 15 after police fired rubber bullets to disperse protesters at the Balitutha plant site in eastern Orissa state, Press Trust of India said. The Communist Party of India (Marxist-Leninist) Liberation will hold a rally in New Delhi on May 20 against the state’s use of force, PTI cited party General Secretary Dipankar Bhattacharya as saying.

Posco, Asia’s most profitable steelmaker, has waited for almost five years to acquire the land it needs for a 12 million metric ton integrated steel mill. The first phase of the South Korean company’s project, including a captive port and iron ore mine, was expected to be commissioned by July this year.

“The Left parties condemn the firing and the resort to force by the armed police against thousands of men and women who were resisting and blocking the predatory moves of Posco to take over large tracts of fertile land,” four communist parties, including the Communist Party of India (Marxist), said in a statement in New Delhi on May 15.

India’s main opposition Bharatiya Janata Party, which was part of the provincial government that approved the project in 2005, has asked its team to prepare a report on the May 15 incident. It plans to send a team to the Posco site for a first- hand assessment of the situation.

‘Police Atrocity’

“We will meet victims of police atrocities and will submit the report to party leadership,” Rudra Narayan Pany, a member of the team and a federal lawmaker, said by phone today from the Orissa state capital, Bhubaneswar. “The government is exploiting the people and indulging in police assaults.”

ArcelorMittal, which aims to build two mills in India, one each in Orissa and neighboring Jharkhand, also has yet to acquire any land. Similar projects by Tata Steel Ltd. and Vedanta Resources Plc are languishing because of land delays.

“When you are setting up projects of this size there are bound to be some people who will dissent,” Posco India General Manager Simanta Mohanty said in an interview on April 6. “The challenge before us is to mobilize the support of the people and get the required land.”

At the Niyamgiri Hills in Orissa, a tribal community and non-governmental agencies have stalled a bauxite mine planned by Vedanta Aluminium Ltd., a unit of London-based Vedanta Resources. Construction has been delayed for more than four years.

To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net; Bibhudatta Pradhan in New Delhi bpradhan@bloomberg.net

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