POSCO India Private Limited (commonly POSCO India or Posco-India) is an Indian subsidiary of Korean conglomerate POSCO.
Its parent company POSCO signed a memorandum of understanding in June 2005 with the state government of Odisha to construct a $12 billion steel plant. Various regulatory delays and controversies prevented the company from starting construction. The memorandum expired in June 2011, and as of April 2012, it has not been renewed. Apart from Odisha, POSCO India has project sites in the Karnataka and Maharashtra states.
History
POSCO signed a memorandum of understanding (MoU) in June 2005, to incorporate an Indian subsidiary and build a steel plant in Odisha. Posco India was incorporated by POSCO in August 2005 with the Registrar of Companies, Odisha, under India's Companies Act 1956.
Odisha
According to the MoU of 2005, POSCO agreed to invest in the Jagatsinghpur district of Odisha to establish an integrated plant to manufacture steel, mine iron ore and other ores, as well as the infrastructure necessary for its operation in Odisha. The MoU listed the following understanding between POSCO and the state of Odisha:
Establish a FINEX/BF plant in phases. The first phase would be completed in two modules, together attracting a total of Rs. 218 billion ($5.1 billion) investment. The first phase would produce 6 million tons per year of crude steel, and 5.64 million tons per year of finished steel. The MoU mentioned a second phase, also to be completed in steps of two modules, together attracting a total of Rs. 215 billion ($5 billion) investment. The second phase would double the plant's capacity to 12 million tons per year of crude steel, and 11.28 million tons per year of finished steel. The state of Odisha promised to be a partner in development. The state agreed to acquire and provide three land parcels to POSCO: about of land in Bhubaneswar for POSCO India to establish its Indian headquarters; about in the state of Odisha to set up a steel plant, build port infrastructure, establish a storage yard for coking coal, and other associated facilities; and, about 2000 acres of land for POSCO to develop a township, recreational activities and all related social infrastructure – of which approximately would be identified adjacent/near to the Steel project and remaining near the mining location. The state of Odisha agreed to work with the central government of India to arrange necessary supplies and infrastructure for steel production by POSCO India. These supplies included water, electrical power, drainage and sewerage, licenses and permits to obtain coal and iron ore, rail links, and a highway road connection. POSCO India agreed to conduct a rapid Environment Impact Assessment (EIA) and prepare a detailed EIA Report and an Environment Management Plan (EMP) for the Project. The Government of Odisha agreed to provide any assistance requested by the company during the time the EIA is conducted and the EMP is prepared. The state of Odisha also agreed in the MoU to use its best efforts to procure the grant of all environmental approvals and forest clearances from the central government of India within the minimum possible time for the project.
From June 2012, controversies and regulatory delays have prevented Posco India's Odisha project to proceed beyond the concept. Posco India has no mining or manufacturing operations in Odisha
Karnataka
In addition to its attempt to establish a steel plant Odisha, Posco-India considered alternate sites for a steel plant. In June 2010, Posco signed a memorandum of understanding with the state of Karnataka at the Global Investors Meet in Bangalore. This memorandum envisions a 6 MMT per year steel plant based on Posco's high efficiency, low environment impact FINEX technology. In May 2011, under mandated stock exchange disclosurer rules, Posco confirmed the memorandum of understanding for the steel works in the state of Karnataka; with a cautionary note that POSCO has not made any decisive plans to implement the Project due to the fact that the Government of Karnataka has yet to confirm certain investment plans for the Project.
The government of Karnataka took a different approach to land acquisition for Posco project than the government of Odisha. The state of Karnataka announced that it will not acquire land on a lot-by-lot basis, rather the land acquisition will be on complete consensus, on all-or-none, and will involve simultaneous negotiations at multiple locations in different parts of the state of Karnataka. In July 2011, the state of Karnataka announced that it is currently working on land acquisition for Posco-India project in the following districts: Gadag, Bagalkot, Bijapur, Raichur and Yadgir.