By Krittivas Mukherjee
NEW DELHI, Nov 5 (Reuters) - A much-delayed $12 billion steel mill project by South Korean firm POSCO, India's biggest foreign direct investment and a barometer of its business climate, may receive a boost next week when an experts' panel meets to review its environmental clearance.
The panel meets on Nov. 9-10 to agree on a recommendation for Environment Minister Jairam Ramesh, whose push for ecological compliance has forced the delay, or outright scrapping, of many big-ticket projects, including some by London-listed miner Vedanta Resources Plc.
The panel's advice is not binding, but the proposed plant by POSCO, the world's third-largest steel company, is being monitored by the office of Prime Minister Manmohan Singh who appears keen to forge strong political ties with Seoul, raising the odds that the project will eventually be given the go-ahead.
Ramesh has also said the POSCO project was "fundamentally different" from Vedanta's plans to expand an alumina refinery and a mining concession, which were rejected by his ministry.
"Once the Experts Appraisal Committee gives me its report, I will take a comprehensive decision," Ramesh told reporters when asked about a final decision.
POSCO wants to build the mill in eastern Orissa state, but has faced delays arising from green clearance issues and protests by local residents who say the plant will disrupt their largely agriculture and forest-based livelihoods.
A previous panel had said POSCO's mill would not displace any tribespeople.
The South Korean company is among several corporations, including Vedanta, that have come under scrutiny from an environment ministry that has been tightening rules, as opposed to other rubber-stamping entities in the government.
That stance has often sparked conflict with other government departments pushing for rapid industrialisation.
Next week's panel recommendation on POSCO will precede a visit by Singh to South Korea, where he will attend a Group of 20 summit. But it was unlikely that Ramesh would make a final decision before Singh's trip, government sources said.
"The matter is being followed at the highest level. Something like this cannot be timed just because the prime minister is going to a particular country which is investing in this project," a government source told Reuters.
POSCO faces another hurdle: a court case filed by a local firm against the Orissa state government, contesting its decision to grant a mining concession to the South Koreans, as the company had also bid for it.
The decision on this case lies with the Supreme Court. But the litigation is unlikely to hold back the start of the POSCO mill's construction if the central government approves it.
POSCO was scheduled to begin production from its plant in Orissa's Kujanga region by the end of 2011. The pact for the mill was signed in June 2005 and also included captive iron ore mining rights in the state's Khandadhar area. (Editing by Bryson Hull and Miral Fahmy)