POSCO, the nation’s top steelmaker, said on Tuesday it decided to pull out of a $5.3 billion steel mill construction project in Karnataka, a state in southwestern India, mainly due to opposition from local residents.
The decision came as the company failed to make any progress in purchasing land for the construction in the Gadag district of central Karnataka for the past three years. Gadag is located near Bellary district, which has the highest deposits of iron ore in Karnataka.
“Instead of dropping the project in Karnataka, the company decided to concentrate on the steel mill project in India’s Orissa, which has recently made some progress,’’ Kim Jin-ju, a manager from the company said.
The steel mill project in Orissa, which is a much bigger project worth $12 billion, had also been delayed for the past nine years for same reason before Orissa’s state government completed the process of acquiring 2,700 acres of land for POSCO’s first Indian steel mill last month.
Different from Indian projects, POSCO’s $3 billion worth steelwork project in Indonesia went smoothly and the company will start commercial operations in December this year. POSCO proceeded the project with local partner PT Krakatau Steel, Indonesia’s biggest steel maker. POSCO has a 70 percent stake in the joint-venture firm PT Krakatau POSCO.
