August 2, 2007 / 1:11 PM / 12 years ago

POSCO gets environment nod for troubled Orissa plant

File photo of a sculpture of POSCO's logo at its headquarters in Seoul, February 2, 2007. India has given environmental clearance for a steel plant proposed by POSCO, a government source said on Thursday, but the firm still faces problems over land and mining rights. REUTERS/You Sung-Ho

NEW DELHI (Reuters) - The government has given environmental clearance for a steel plant proposed by South Korea’s POSCO, a government source said on Thursday, but the firm still faces problems over land and mining rights.

POSCO wants to build a $12 billion steel complex in mineral-rich Orissa, which would be India’s largest foreign direct investment.

“Yes, the project has been given an environment clearance,” said an official in the environment ministry, who could not be named. The official nod was seen as a formality.

The proposed POSCO investment ran into trouble after locals protested against plans to compulsorily buy their land for the plant, which they say could displace up to 20,000 people.

Clashes between supporters and opponents have left scores injured, while villagers detained two of POSCO’s Indian executives overnight in May.

The firm is also yet to finalise an iron ore mining lease.

State-run Kudremukh Iron Ore Co. has staked a claim to the mines which POSCO wants, but government officials say they are trying to resolve the issue quickly.

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