Jan. 10 (Bloomberg) -- India cleared a key hurdle for Posco’s 520 billion-rupee ($8.4 billion) steel plant a week before South Korean President Park Geun Hye’s visit, signaling the project may move forward after an eight-year delay.
The environment ministry on Jan. 8 revalidated environment approval for the project in the eastern state of Odisha, Posco India spokesman I.G. Lee said in a phone interview yesterday. South Korea’s largest steelmaker had waited almost two years for the sign-off after the nation’s pollution watchdog suspended approvals in 2012.
Posco’s plant is among projects valued at $160 billion that remain stalled a year after Indian Prime Minister Manmohan Singh set up a panel to accelerate investments. Bureaucrats unnerved by graft probes and a possible power shift in general elections due by May are delaying approvals and hurting Singh’s effort to boost economic growth from a decade low.
Park, who took office last year to become South Korea’s first female leader, will visit India from Jan. 15 to Jan. 18. It’s the first visit by a South Korean leader to Asia’s third-biggest economy since 2010, when her predecessor Lee Myung-Bak asked for progress on the steel plant during a trip to New Delhi.
Shares of the company ended an eight-day loss and rose as much as 1.5 percent to 311,000 won. They traded at 309,500 won as of 12:32 p.m. in Seoul trading, while the benchmark Kospi index declined 0.6 percent.
Posco in July said it scrapped a separate plan to build a mill in the southern Indian state of Karnataka because of delays in getting mining rights and purchasing land. The Pohang-based company had signed an initial agreement for the 323 billion-rupee integrated mill project in June 2010.
Posco won approval from the nation’s environment ministry for its Odisha factory, billed as the biggest overseas investment in India, in May 2011. The permit was suspended by the National Green Tribunal in March 2012 following a petition from activists Prafulla and Biranchi Samantray challenging the decision. The tribunal asked the government to reassess the conditions on which environmental clearance was granted.
The tribunal may hear the case on Jan. 13, Lee said.
An environment ministry panel in June imposed additional conditions on the company, which included spending 5 percent of the total project cost on social work.
The Odisha project has also languished since 2005 because the local population refused to vacate government-owned land they had occupied for generations. Posco has acquired some of the more than 2,700 acres (1,093 hectares) of land needed to build an 8 million-ton steel complex, while the state government is awaiting the tribunal’s clearance before transferring the rest of the land to the company.
To contact the reporter on this story: Abhishek Shanker in Mumbai at email@example.com