Why green nod to Odisha project may not be end of Posco's troubles

It marked the end of an eight-year long wait; but it could well mean the beginning of another long and indefinite wait. On the face of it, there is much to rejoice about for the South Korean steel giant Posco. It has now got the much delayed environment clearance for its 8 million tonne per annum (MTPA) Greenfield steel plant in Jagatsinghpur district, already granted and revoked once, just ahead of the four-day visit of South Korean President Park Geun-hye to India beginning from January 15. Now that it has received the green nod from the Union Ministry of Environment and Forests (MoEF), the Korean steel major may also get the National Green Tribunal (NGT) to revoke the embargo it had imposed in May last year on felling of trees on the land acquired for the project at its next hearing on Monday.

Most importantly, within 24 hours of MoEF clearance, the Odisha government on Friday cleared the long pending proposal to give it prospecting licence (PL) for the iron ore ‘jackpot’ in Khandadhar mines in Sundargarh district. “The Chief Minister has already cleared the file and we will be sending all the clarifications and details that the Centre had asked for with regard to the grant of Prospecting Licence for Khandadhar mines to Posco,” as senior official of the Steel and Mines department told Firstpost on Friday.

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[caption id=“attachment_965681” align=“alignleft” width=“380”]  Having already waited more than eight years since signing the MoU with the Odisha government for the plant on June 22, 2005, Posco has made it clear that it is in for the long haul. But given the tortuous course that events have taken, it is a moot question how long it can wait for the project to get off the ground.Reuters[/caption]

But despite the sudden favourable turn of events, work on the project may not take off in the real sense any time soon because of a host of imponderables.

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For one thing, the Odisha government’s clearance of the proposal to grant PL to Posco for iron ore mining in Khandadhar, which has estimated reserves of over 160 million tons, does not really amount to much in the backdrop of what happened to Vedanta’s proposal to mine bauxite in the Niyamgiri hills. All the factors that frustrated Vedanta’s dogged efforts to lay its hands on the rich bauxite deposit in the Niyamgiri hills, except perhaps the religious angle, are present in Khandadhar as well; the stiff opposition of the primitive Paudi Bhuyan tribals who inhabit the hills and its surroundings; the rich biodiversity of the hills and the opposition of the entire spectrum of political forces from the BJP to the Maoists.

The Forest Rights Act (FRA) and the Gram Sabhas are bound to come into the picture once the battle hots up, stopping Posco on its tracks. Khandadhar may prove to be a much tougher - and longer - battle for the Korean steel major than the opposition of the people at the project site near Paradip. It has already taken more than seven years for Posco to clear the legal hurdles put on its way by the 226 other claimants for the mines since the Naveen Patnaik government recommended its case for PL in Khandadhar in 2006. The fresh hurdles certain to be placed by local tribals and activists in the form of court cases could well take several years more to clear. Even the MoEF appears to be aware of such a possibility. That is why, in granting environmental clearance to the steel plant project, it has asked Posco to make ’long term’ arrangements with Odisha Mining Corporation (OMC) or private miners for sourcing raw material to run its steel plant.

There is another reason for Posco to hold back plans for celebration. The environmental clearance came only after Posco agreed to drop its insistence on having simultaneous clearance for its captive port project, an integral component of the overall project that the company has made clear is non-negotiable. “The idea is to put the steel plant project over and above everything else. Once the project comes up, we will follow up on the port,” a Posco India official said. But in the same breath, he also admitted that the company is unlikely to make any big investment on the project till it gets the go-ahead for the port project.Then there is the small matter of the people in the project area in Jagatsinghpur, who are still putting up some last ditch resistance despite the acquisition of the scaled down requirement of 2, 700 acres of land for the project. Their numbers may have dwindled over the years, but there is a still a committed core that is determined to fight it out till the very last. To make matters worse, even the supporters of the project have now upped the ante and are demanding the fulfilment of their 29-point wish list before work is allowed on the ground.

Having already waited more than eight years since signing the MoU with the Odisha government for the plant on June 22, 2005, Posco has made it clear that it is in for the long haul. But given the tortuous course that events have taken, it is a moot question how long it can wait for the project to get off the ground.