$8 bn suspense ends, Posco picks Orissa

South Korean steel giant Posco today said it would shortly seal a $8-billion investment the deal with the Orissa government. This sets aside fears the company might shift the investment to Brazil.

"The memorandum of understanding for the investment would be signed in the next couple of months," Chang Oh Kang, president of Posco, said after a meeting with Navin Patnaik, Orissa Chief Minister, on Tuesday.

"Our investment in Brazil is in no way linked with what we are doing in India. They are two separate and mutually independent investments," he added.

"We have had fairly serious discussions with Posco and I'm confident that a deal would be signed very soon," said Patnaik.

Kang said Posco, the fourth-largest steel producer in the world, had zeroed in on Paradip in Orissa for its proposed 10 million tonne steel plant.

"Soil tests conducted

by our team showed that Paradip would be the best location for the plant," he said. Kang, along with a five-member team, had visited Paradip earlier in the day. Posco was also looking at Dhamra and Dubri as possible sites to locate its plant.

During the meeting with Patnaik, the Posco team is understood to have discussed the key issue of raw material availability and the state government's commitment to developing infrastructure around the plant.

Indicating that the state will go all out to woo the mega investment, Patnaik said that Orissa would do everything appropriate to help Posco.

"It is a major investment which could change the face or Orissa, and the country. Posco can expect full co-operation from us," he said.

As part of the deal, Posco is seeking a long-term lease with the ministry of coal and mines to ensure adequate supply of iron ore and coal.