PRESS RELEASE
POSCO is a global steel major, the 5th largest
in the world, and has an excellent track record of setting up state-of-the-art
steel plants in record time.
The capacity of
12 million tonnes per annum will make the project not only the biggest in
The project will
be completed in two phases. Each phase will consist of two modules of 3 million
tonnes per annum. The first module is expected to be completed by June, 2010.
Thereafter, 3 million tonnes of capacity will be added every two years. Thus,
the plant will reach its full capacity of 12 million tonnes by 2016.
The response of the Govt. of India to the Project has been
extremely positive. The development of road and rail linkages from the mining
and coal belts of Orissa to the location of the steel plants and Paradeep port
has been accorded very high priority and placed on a fast track.
With POSCO’s investment in Orissa, there is likelihood of
many other medium and large Korean and Indian companies seeking investment
opportunities in the ancilliary and downstream industries in the steel sector.
The setting up of the steel plant by POSCO is likely
to bring in a stream of revenue both to
the Central Govt. and to the State Govt. The Central Govt. is likely to benefit
to the tune of approx. Rs.89,000 crores over a period of 30 years by way of
excise and customs duties, service taxes and corporate income tax.
The Govt. of Orissa on the other hand, is likely to
benefit to the tune of approx. Rs. 22,500 crores over a period of 30 years by
way of sales tax/VAT, works contract tax, electricity duty, royalties, Orissa
Infrastructure Tax and share of Central taxes.
The entire project
including mining, steel plant and port is likely to generate direct employment
to the tune of 13,000 persons and indirect employment for 35,000 persons. During
the construction stage, it is estimated that POSCO would need more than 18,000 skilled
workers (such as carpenters, welders, brick layers, painters, electricians
etc.) daily at the peak of construction activity.
POSCO will set up a Company registered in
To meet the raw material requirements of the project, iron
ore will be provided only for captive use of the steel plant to be set up by
POSCO in Orissa. For this, 600 million tonnes of iron ore will be made
available for captive use which will be adequate to meet the requirements of
the steel plant for a period of 30 years. No ore will be permitted to be used
for pure trading within the country or by way of export. The company will have
to achieve a number of detailed milestones before recommendation is made for
Prospecting Licence in the first instance and Mining Lease subsequently. The
recommendation for mining lease will be made in two phases commensurate with
the first two modules and the last two modules of 3 million tonnes each. The first recommendation will be sent only
after the Company awards order to the extent of 50% of the civil and structural
works and 20% of the machinery of the first two modules (=6 million tonnes).
The second recommendation will be sent when similar progress is made for the
second two modules (=6 million tonnes) and after the first module of 3 million
tonnes is commissioned. Grant of mining lease will thus be in a phased manner
commensurate with the progress of the plant.
In case the company needs to import iron ore of low
alumina content, it will be permitted to export equivalent quantity of high
alumina content ore to its Korean Plants subject to a ceiling of 30% of the ore
consumed by their plant at Paradeep in a given year. Any export of ore by way of swap will be
allowed only after an equivalent quantity of ore has been imported for the
plant in the first place. There will thus be no net outgo of ore from Orissa
without value addition and the concept of net nil export will be adopted.
The proposed MoU, keeps the interest of Orissa and its
rapid economic development at its core and promises to herald a new era
of industrialization and progress in the State.
You can also
download the press note, photo gallery, slide show, speech of the Chief
Minister, Orissa from
www.orissa.gov.in
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