Environment minister Jairam Ramesh has asked Orissa to ensure that POSCO, which has been given go ahead, is not allowed to export iron ore.
"I would now hope that the new MoU would be negotiated by the state government in such a way that exports of iron ore are completely avoided," Ramesh asserted while granting clearance to the 12 MT steel-to-port project at Jagatsinghpur with USD 12 billion (Rs 54,000 crore) investment.
"...I could well have waited for MoU to be renewed ...But that would have smacked a filibustering," he made it clear.
The Memorandum of Understanding (MoU) between POSCO and Orissa signed on June 22, 2005, and expired last year, had the provision that the company could export as much as 30 per cent of iron ore from the state and would have to import a similar quantity.
However, Ramesh while allowing diversion of 1,253 hectares of forest land for POSCO’s mill and captive port put forth the condition that the revised pact should not allow exports of raw material.
"I am conscious of the fact that the MoU between the state government and POSCO expired last year and has yet to be renewed. This MoU had provisions for the export of iron ore which made me deeply uncomfortable with this project.
"I would expect that the revised MoU between the state and POSCO would be negotiated in such a manner that exports of raw material are completely avoided," Ramesh mentioned.
South Korean major, however, assured that no exports would be allowed from the project.
"There were no plans for export of iron ore from the project and now also we do not intend to do any exports. The low-grade iron ore available will be entirely consumed in the plant, which will be built on finex technology," POSCO India Vice President Vikas Sharan told PTI.
Under finex technology, which is presently not available in India, low grade ore or fines is used in steel making.
While Environment Minister's pronouncement augurs well with the Steel Industry which has been demanding a ban on exports of the vital steelmaking raw material, mining body FIMI has termed the clause as "unwarranted."
"The expired MoU had provision of export of high-alumina iron ore against import of low-alumina iron to blend it with the most efficient technology to be used by POSCO for blast furnace," Federation of Indian Mineral Industries (FIMI) Secretary General R K Sharma said
"Under the circumstances, We find the clause for the ban on exports as totally unwarranted," Sharma added. FIMI has been opposing any move to ban ore exports.
India, world's third largest iron ore exporter, produced 218 million tonnes of iron ore in 2009-10 and exported almost half of it, mostly in the form of fines.
It is estimated that the country has 22 billion tonnes of reserves.