Wednesday, August 24 2005 17:33 Hrs (IST) - World Time -

New Delhi: The MOU signed between Orissa Government and South Korean steel major POSCO makes it clear that no iron ore export will be allowed from the captive mine unless it was replaced by equal quantity of high-grade ore, Government told the Lok Sabha today (August 24, 2005).

In his response to a calling attention notice on the agreement between Orissa and POSCO moved by CPI-M member Basudeb Acharia, Mines Minister Sis Ram Ola said the state government has agreed to grant prospecting licenses and mining leases for 600 million tonnes of iron ore to the company.

This, he said, was done after following prescribed procedures and completion of required milestones.

Earlier BJP and BJD members strongly objected to several statements of Acharia who was critical of the MOU and picked holes in the agreement alleging that iron ore was being given at very cheap price to the multinational.

The Minister said all mineral concessions ie Mining Lease Prospecting Licence, Reconnaissance Permits are granted by the state governments.

However, the Ministry of Mines is yet to receive any proposal for grant of Prospecting license or Mining lease to M/s POSCO from the state government of Orissa, Ola said.

The Minister said his ministry will examine the proposal in detail, in accordance with law and in consultation with concerned ministries when an application is duly forwarded by the state government, he said.

Ola said the views expressed by Members of Parliament would be given due consideration.

The proposed investment as envisaged by MOU would be around 12 billion U.S. dollars, Ola said adding the project will result in development of infrastructure in the region.

POSCO is to construct a dedicated railway line from the mine to the project site, he said adding it also has the option to build a minor port and/or a berth at Paradeep Major port.

Land would be made available to the company for developing a township with water supply, housing and power supply.

From the MOU, it is observed that the Company will need equivalent of 600 million tonnes of iron ore to meet the requirements of the proposed steel project of 12 million tonnes per annum, the minister said.

The company may swap certain quantities (not exceeding 30 per cent of the total requirement for the Paradeep Plant annually) of such iron ore, which have high alumina content iron ore of equivalent or better iron content, for blending, the Minister said.