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Why did POSCO select India for overseas investments?

The Indian market has a huge growth potential in terms of steel consumption. As of 2004,
steel production in India stood at 35 million tons but its goal for the year 2020 is 100
million tons. To keep up to this target, the Government of India is actively encouraging
steel consumption so that the steel industry acts as the locomotive for the overall
economic growth of the country. In addition, the country’s rich mineral resources and
availability of skilled labor makes it an attractive destination for investment. On the other
hand, India will be able to derive huge benefits in terms of employment generation,
revenues and FDI inflow. In addition, this project will proffer mutual cooperation and
amity between India and Korea

What is the proposed investment of POSCO-India and in which areas


will it be utilised in India?

The 12MTPA integrated steelworks will be made in three phases of 4MTPA capacity per
phase with FINEX technology. Other facilities like Steel Melt Shop with Converters,
Casters, Rolling Mills, Lime Calcining Plant, Oxygen Plant, Captive Power Plant, etc.
(collectively, the “Steel Project”) in Jagatsinghpur District of Orissa will also be
constructed. Iron ore mine development for smooth operation of the 12 MPTA steel plant
will also be taken up. In addition, infrastructure such as captive port, railway, and roads
for efficient and secure operation of POSCO-India’s steel works will be built.

How will POSCO’s investments in India benefit the allied industries and
overall economy?

The POSCO-India project will create enormous opportunities for developing ancillary
and down-stream industries close to the steel plant. Some of the industries that are likely
to come up include construction material manufacturing, by-product treatment,
supplement material providing, maintenance shops and downstream industries like steel
fabrication, plate & coil processing. There is a vast scope of indirect employment
opportunity once the ancillary industries are set up in the area.

A mega integrated steel plant such as the one POSCO will build in Orissa will lead to
significant growth and investment in the country. Owing to the unique nature of the steel
industry, which requires large equipment facilities, the project is envisaged keeping in
mind the operations of 30 to 50 years. The project will extensively contribute to the
development of India’s economy and society at large.
As a part of its corporate social responsibility initiatives, what are the
programs POSCO plans for India?

POSCO-India will fully support and work with the Orissa government to spearhead social
responsibility programs in the state. Some of the identified areas to begin work on are
education and healthcare sector. POSCO-India has initiated programmes like POSCO-TJ
Park Foundation Scholarship to promote education for the students in India especially
Orissa. For the betterment of local people it successfully conducted a Cleft lip and palate
correction camp where patients from Jagatsignhpur were given expert medical attention
by a specialized team from Korea and senior professors from SCB Medical College,
Cuttack.

The company has already launched a ‘villagers friendly Programme’ for the benefit of
local people. A detailed corporate social responsibility plan is currently being worked
upon which will include in depth inputs from the Government of Orissa and other
relevant bodies. POSCO-India will always strive to raise the standards of living of the
people of the state through its various social responsibility endeavors.

What are the infrastructure development activities being planned


around the POSCO-India project?

The Railway Ministry has given the rail transportation clearance (RTC) for POSCO's
steel project. Railway links such as Tomka-Banspani line (155 km) and Haridaspur-
Paradip line (82 km) are being established to facilitate the project. In addition, the central
government is also constructing a single line between Banspani and Tomka and an
additional parallel line between Cuttack-Paradip has already been completed. POSCO-
India will also construct railway sidings, adding up to about 40 km, in the mining areas
and the plant level on its own.

Construction of the surge protection embankment connecting Paradip Port and the
proposed plant site is expected to begin soon which will be followed by construction of
access roads. The other road links which are being planned include Chandikhol – Paradip
National Highway which will be made double lane and the Cuttack – Paradip state
highway which will be widened.

POSCO-India will build a Captive Port at the mouth of the Jatadhari River, 10 km from
Paradip and a Captive Power Plant (CPP) with a capacity of 1300 MW. The Government
of Orissa will supply power to meet the requirements during the construction period. The
company will also lay pipelines for industrial water utilization from Jobra barrage.

POSCO-India is working with the Government of India and the State government of
Orissa to build the infrastructure required for the success The Railway Ministry has given
the rail transportation clearance (RTC) for POSCO's steel project. Railway links such as
Tomka-Banspani line (155 km) and Haridaspur-Paradip line (82 km) are being
established to facilitate the project. In addition, the central government is also
constructing a single line between Banspani and Tomka and an additional parallel line
between Cuttack-Paradip has already been completed. POSCO-India will also construct
railway sidings, adding up to about 40 km, in the mining areas and the plant level on its
own.

Construction of the surge protection embankment connecting Paradip Port and the
proposed plant site is expected to begin soon which will be followed by construction of
access roads. The other road links which are being planned include Chandikhol – Paradip
National Highway which will be made double lane and the Cuttack – Paradip state
highway which will be widened.

POSCO-India will build a Captive Port at the mouth of the Jatadhari River, 10 km from
Paradip and a Captive Power Plant (CPP) with a capacity of 1300 MW. The Government
of Orissa will supply power to meet the requirements during the construction period. The
company will also lay pipelines for industrial water utilization from Jobra barrage.

POSCO-India is working with the Government of India and the State government of
Orissa to build the infrastructure required for the success

How many villages / families / people are going to be displaced?

According to present estimates about 400 families (2,000 people) in seven villages will
be displaced for the Steel Plant Area. The company has minimized displacement by
changing steel plant layout about 60 times. Certain densely populated regions in Dhinkia,
Gobindapur and Nuagaon have been excluded.

Is there any scope to shift the project to an area where there is less
habitation and agricultural activities?

Since we already fitted the plant layout to less inhabited area and have reworked on the
layout about 60 times, it is very difficult to shift the project area. Moreover, there would
be no such land where displacement will not be an issue

How was POSCO's R & R in Korea


POSCO has successfully rehabilitated all the displaced and affected people at Pohang and
Gwangyang site in Korea. In both cases government of Korea proactively dealt with the
entire process of displacement and rehabilitations and timely completion of the project
could be achieved.

Adequate and fair compensation with various benefits were given to the displaced and
affected such as job opportunities, scholarships, Interest Free Loans, etc. The displaced
families and their children have been working in the company and its subsidiaries

Do you have any plans for providing alternative livelihood opportunities


to the farmers, landless agricultural labourers and fishermen?

POSCO-India’s philosophy on R&R is to provide the displaced and affected people better
living condition than before. The Company according to Orissa state new R&R policy
will give adequate and fair compensation. Secondly, POSCO-India will finalise its
corporate R&R package after the socio-economic survey in the site. For proper
compensation, transparent and sincere discussion will be made through RPDAC where
village people can participate. Besides compensation, the company is also considering
vocational training for their stable living and their children’s future

Where does the Company plan to have the Rehabilitation Colony &
what kind of houses and other facilities like water, recreation etc. Are
you going to provide?

POSCO-India to the best of its abilities will try and provide a better way of life to the
displaced and affected people. All issues related to rehabilitation colony and other
amenities will be discussed in the RPDAC (Rehabilitation and Periphery Development
Advisory Committee) with representation from the to-be-displaced families. Facilities to
be provided in the Resettlement habitat also will be discussed and decided in the
committee.

How will POSCO-India compensate betel vine cultivators & Local


fishermen who will lose their livelihood due to the project?

POSCO-India will follow the R&R policy guidelines of Government of Orissa. Specific
compensation will be decided by Compensation Advisory Committee (CAC) under the
chairmanship of the Collector Jagatsinghpur. The committee will decide

What is POSCO-India&'s strategy to understand the local situation and


win over the locals?
POSCO-India wants to grow with locals. We would like to contribute to enhance their
living. In order to know their concern and expectation, direct dialogue is necessary. The
Kujang office has been opened to reach out to the locals. We have opened the door to the
locals. We will listen to their voices and solve the issues together with village people.

How does POSCO-India plan to employ the local people who mostly
lack technical education?

The company will always give priority to local population in this regard. Local people
will have opportunity to seek employment through advertisements issued from time to
time and the R& R policy. There will be vocational and self employment training for
better employability of the displaced families. The company will pick up young talents
from the state through employment exchanges, give them placement and upgrade their
skills.

Will POSCO-India give priority to local people in every sphere of


employment?

The answer is linked to the necessity of technology. The plant must get the people it
needs to operate it. And in pursuit of getting the right people, the company will give
priority to local population in every possible way

Other major steel companies in India use local ore, why does POSCO-
India want to swap?
It is a big disadvantage to swap and use foreign iron ore, with only the transportation
costs amounting to more than $30/ton. However, the reason we are pursuing the
swapping method is to maximize productivity and quality of our products.

In order to produce steel with high productivity and high quality, the Alumina content of
iron ore must be maintained at low levels (1.35%). Because India’s iron ore has
comparatively high Alumina content (2.5~5%), it needs to be blended with foreign iron
ore of low content Alumina (0.7%). Accordingly, we will swap iron ore as per
requirements only.

Therefore, we are actively working for a plan to maximize the use of India’s economical
iron ore, by importing means such as the FINEX technology, etc.

What is FINEX Technology?


The groundbreaking, eco-friendly FINEX technology has been chosen over the Blast
Furnace route for the POSCO-India project.

FINEX, which POSCO has indigenously developed, is an environment-friendly iron-


making process that allows the direct use of iron ore fines and non-coking coal as
feedstock. In addition to significantly lowering operating costs and emissions compared
to a Blast Furnace process. Moreover, a FINEX plant occupies only 60 per cent of the
area of a Blast Furnace plant of equal capacity, thereby requiring less space.

Why POSCO is not buying iron or at market price and sticking to


mining lease?

The objective of the state government of Orissa is to provide Mining Lease in order to
attract industries and develop the area. POSCO-India will follow the policy of the Orissa
State Govt and obtain the Mining Lease under the same conditions as that of other
companies, and pay royalties.

If the granting of Mining Lease to POSCO-India is a preferential benefit, it means


granting ML to other steel or mining companies is also a preferential benefit. It is
believed that if POSCO’s operations technology and its newest facilities are used in
Orissa, it would allow effective value addition to Orissa natural resources, and would
have a ripple effect on the other steel companies as well.

How POSCO's mining system will be different from others?

Considering the needs that 20 million tonnes per annum of iron ore will have to be
supplied to the steel plant stably and consistently in terms of quality, each mine will have
to be a well mechanized one and a bigger scale one than the existing Indian mines. As
well, sophisticated beneficiation plant will also be needed to ensure the consistent quality
of ore.

POSCO-India will utilize Indian exploration agency for most of its key positions in
developing and operating the captive mines. We will also be able to consider introducing
advanced mining technologies by utilizing the well qualified and experienced mining
consultants from other countries like Australia and Brazil.

Is the proposed port at Jatadhari going to affect the movement of Olive


Ridley Turtles?
Bhitarkanika is unique habitat and a sanctuary for highly endangered species world over,
Olive Ridley sea turtle. It is situated about 20 Km north of Paradeep Port. Based on the
scientific data, the proposed port area is not directly related with nesting and mortality of
Olive Ridley. POSCO-India will always focus on elimination of environmental risks from
activities of port.

Since Paradip Port is ready to create necessary infrastructure for the


POSCO Project, why are you planning to have a Captive Port?

One cannot think about a large-scale steelworks and a captive port separately.

A captive port is essential for a large scale steelworks, and must be available for use at all
times, taking into account logistical convenience and economical efficiency, among other
factors. In the beginning three areas of Dhamra, Duburi, Paradip were compared, and
Paradip, with its favourable soil quality, was selected for the port.

A dedicated port is more economical and efficient than expanding and using the existing
Paradip Port, which is 10km away from the plant.

Construction of a captive port is beneficial even when non-monetary factors such as


logistical convenience, inventory control, efficiency of steelworks
operations/maintenance, convenience for infrastructure facilities, expandability, etc. are
taken into consideration.

Similar Examples of Foreign Steelworks:


Korea’s Gwangyang & Pohang Works, Japan’s JFE Kurashiki Works, Burns Harbor
Works of the US, Canada’s Stelco Hamilton Steelworks, Fos-sur-Mer Steelworks of
France, etc.