INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

POSCO SET TO BRING IN $27B MORE

 This could well turn out to be the largest FDI proposal yet. Global steel major Posco is all set to bring in another $27 billion over the next seven years, to set up more steel plants in Chhattisgarh and Jharkhand. Posco has already committed $12 billion for its 12-million-tonne steel plant in Orissa. Put together, Posco's investments would turn out to be more than India's total FDI inflow since 1991, which stood at $38.9 billion on March 31, 2006.

   Posco officials have indicated their investment plans during recent discussions with commerce ministry officials in Korea. “We have received assurances from the company for fresh investments of $27 billion in the Indian steel sector over the next seven years,” commerce ministry officials said. They added that new investments would mainly be for setting up steel plants in new locations but the company would also develop infrastructure such as ports and roads. It would also look at mining new iron ore resources in the country. A delegation from the commerce and industry ministry was recently in Korea to explore the possibility of co-operation between the two countries, including identifying areas for fresh investments.

   Though the MoU for Posco's Paradeep project was signed in the second half of last year, the company is still awaiting clearances for iron ore mining lease to support its steel plant. Moreover, the company is facing problem in getting possession of land in the wake of growing opposition from families likely to get displaced.