The Hindu Business Line : We are not hungry for iron ore, says POSCO

POSCO, the South Korean steel major, will not push for exports of iron ore from India if the people and the Union Government do not want the exports to happen, authoritative sources in the company told journalists of The Hindu group of publications today. "POSCO is not hungry for iron ore," the sources said.

POSCO (Pohang Steel Company), which intends to put up a 12-million-tonne integrated steel project in ore-rich Orissa, has been in the thick of a controversy over its proposal to export 400 million tonnes of iron ore over a period of 20 years.

Some have opposed export of iron ore on the grounds that such scarce and non-renewable mineral resources should not be exported but should be converted into finished products.

The sources said that the MoU with the Orissa Government speaks of the iron ore exports "in the future" and "if possible".

"We look at this clause as an expression of goodwill and mutual friendship," they added.

Stating that POSCO had long-term contracts for its ore requirements, the sources said that the company "does not have reason to abuse Orissa project to secure its ore."

POSCO is likely to put up four blast furnaces of three mtpa each in a phased manner. Such huge blast furnaces necessarily require low-alumina iron ore, which will have to be imported, perhaps from Brazil.

However, the sources said, POSCO would swap any imported low-alumina iron ore with an equivalent quantity of Indian ore.

Why would POSCO need to export the equivalent quantity of iron ore out of India even if its technology needed some imports of a better grade ore? In reply to this question, the sources said that such import balancing was needed for replenishment of its iron ore stock. Otherwise, if POSCO had to bring raw materials into India from elsewhere, there was no need to locate the plant in the country.

The sources stressed that the proposal for ore swapping had nothing to do with its wish to take Indian iron ore for its plants in Korea.

They said that while POSCO, Korea would like to import ore from India, it would not make it a pre-condition for investing in building a steel plant in India. The sources further said that out of the proposed investment of $12 billion (Rs 54,000 crore), as much as $10 billion was only for the steel plants. Of the rest, $900 million was for creating a port for bringing in coal and taking out finished products.

Another $ 100 million was for putting up a township and a railway line. Only $1 billion has been set apart for mining. The "highlight of the investment" was steel making, not mining, the sources said.

The POSCO sources also denied that the proposed investment of Rs 54,000 crore was "inflated".

They said that the project also included creating of attendant infrastructure too. It was also noted that POSCO had about $5 billion of cash reserves and, therefore, had the ability to invest.

On the question of what technology POSCO would use, the sources said that the company was yet to take a decision on it. The sources denied that POSCO would "unfairly gain" from its SEZ status.

"Every company in India which meets the conditions of SEZ and follows SEZ gets the same benefits that POSCO is expected to get."

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We are not hungry for iron ore, says POSCO

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