India regional leader claims progress on Posco steel project

23rd August 2010, Comments 0 comments

The chief minister of a remote eastern Indian state said Monday he had won a promise from the prime minister to speed clearance of a 12-billion-dollar steel project by South Korea's POSCO.

But Orissa Chief Minister Naveen Patnaik failed to wrestle a similar pledge from the premier for another big project in his home state -- plans by Britain-based Vedanta for a mine on land held as sacred by an Indian tribe.

The rows over the two projects have highlighted the difficulties for India's government in promoting economic development while safeguarding the interests of local groups who fear loss of land and livelihood.

Prime Minister Manmohan Singh said he would "give a push to the (POSCO) project. He said it should be expedited," Patnaik told reporters in New Delhi after meeting the Indian leader.

Asked about the Vedanta project, Patnaik said only he would meet Environment Minister Jairam Ramesh to discuss the resource company's plan to mine bauxite in Orissa on land the 8,000-strong Dongria Kondh tribe say is the home of their god Niyam Raja.

Acquisition of land for the POSCO project was blocked earlier this month after the environment ministry said the state government falsely claimed tribal people did not inhabit the area sought for the plant, despite "documentary" evidence they did. The Orissa government denied the charges.

POSCO's plans to build a steel plant with an annual capacity of 12 million tonnes in the eastern state of Orissa have been hailed as India's largest foreign investment since the country launched market reforms in 1991.

Both Posco and Vedanta have said their projects will help alleviate poverty in the deeply deprived region.

The Dongria Kondh say they depend for their crops and livelihood on the remote Niyamgiri Hill range where Vedanta's mine is planned.

Vedanta wants the mine to secure a supply of bauxite needed for a nearby aluminium refinery, but earlier this month the project received a damaging blow when a report commissioned by the Environment Ministry said the mine would threaten the "very survival" of the tribe and have a huge environmental impact.

© 2010 AFP

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