Posco, South Korea’s biggest steelmaker, has put on hold plans to build a steel plant in India after land acquisition and farmer protests stalled the $12 billion project for a decade.
The project in India’s eastern state of Odisha has been “tentatively postponed,” Chief Executive Officer Kwon Oh Joon said Wednesday. Until Indian Prime Minister Narendra Modi “offers better deals, we won’t resume and for now we will head to the west and do more downstream work,” he said, referring to a plant the company operates in the state of Maharashtra.
Posco’s 12-million ton-a-year Odisha project, which was the nation’s biggest foreign investment, failed to take off because of opposition from local farmers and the failure to secure iron ore mining leases, initially promised for free to the company.
The federal government in January decided it would auction all mineral resources, including iron ore and limestone. That meant Posco had to bid for securing iron ore blocks, which increased costs.
The steelmaker was eventually able to overcome local opposition and get the state to acquire about 2,700 acres (1,093 hectares) of land for the first phase in 2013.