South Korean steelmaker POSCO has been advised by the Indian Government to source iron ore on the open market rather than wait for its own captive mine for a proposed steelmaking facility in Orissa.

The long-awaited steel plant has been a long time coming – POSCO signed an MOU with the State Government of Orissa in 2005 – but now work on the project, worth an estimated $12 billion, is likely to commence in a matter of weeks, following an announcement by Indian Prime Minister Manmohan Singh and prompted by a State visit from South Korean President Geun-hye Park.

As for the proposed steelworks, it is estimated that it could take 18 months to complete and while the Indians are advising the South Koreans not to wait for a captive mine, POSCO executives are claiming that a captive mine is a core element of the project and one of the main incentives for developing the plant in Orissa.

The proposed Orissa plant will rely upon environmentally-friendly Finex technology, for which POSCO holds patents, and will create 18,000 jobs plus a further 870,000 in related industries.

According to POSCO, “Once the Orissa steelworks is completed, quality steel materials can be provided, ultimately contributing to steel demand industry development and the regional economy and that of India overall.”