SC invalidates Orissa HC order on iron ore mining licence to Posco

SC invalidates Orissa HC order on iron ore mining licence to PoscoIn a Friday verdict, the Supreme Court invalidated an Orissa High Court order which had annulled the State government's January 2009 recommendations in favour of granting an iron ore mining licence to South Korean steelmaker Posco.

The decision by the Supreme Court may pave the way for Posco to get the necessary go-ahead for a much-awaited preferential access to iron ore for the $12 billion project which the company has planned in Orissa.

The Orissa project - which will have an annual production capacity of 12 million tones - has been in the doldrums for the last eight years. All these years, Posco has been waiting to get the required clearances as well as land and an iron ore mining licence for commencing work on the plant.

The Friday judgement by the Supreme Court clearly bolsters Posco's prospects, as a bench of Justice RM Lodha and SJ Mukhopadhaya has instructed the Centre to examine the issue of giving Posco the required iron ore mining licence based on the recommendations of the Orissa state government under the Mines and Minerals (Development and Regulation) Act.

Noting that the Centre's support may help Posco get access to a captive mine which will give the company steelmaking raw material iron ore, metals expert Rakesh Arora - head of research at Macquarie Capital Securities (India) - said that the Centre's backing of Posco's Orissa positive was a big "positive," and added: "There's no doubt that without iron ore, this project was not starting at all."