A few weather-beaten shipping containers, a swathe of sand and a bitterly divided village: That is all South Korea’s POSCO has to show seven years after it announced plans for a US$12 billion steel mill on a fertile strip of India’s east coast.
Last week, the project took a step forward as land was taken over from farmers for the first time since 2011, and yet POSCO is still a long way from its goal of forging steel there. Despite the years of protests and battles over environmental clearances, POSCO insists it is not about to throw in the towel. However, if a court ruling on access to local iron ore goes against it, that could push it over the edge.
The fiasco over what was billed as India’s single largest planned foreign investment epitomizes the slow pace of industrialization in a densely populated country where almost every major project involves moving farmers off their land.
Photo: Reuters
Indian Prime Minister Manmohan Singh has repeatedly vowed to change the snail-like progress of India’s biggest industrial developments and end delays to road building and power stations, blamed for dragging economic growth and fueling inflation.
However, the issues refuse to go away. “Police out! Death to POSCO!” a hundred or so villagers and Communist Party activists shouted at a group of policemen who set up camp in the village of Gobindpur last week, the first police presence there since protesters rose up against the project in 2006.
A few kilometers away, POSCO has built a site office in nine shipping containers. Along with a generator, a flimsy barbed-wire fence and a couple of signs, this is all the work that has been done on the 809 hectares set aside. They need another 280 hectares before work can begin.
POSCO India reiterated its “strong resolve and commitment” to the project in a statement on Friday, but analysts say the company may think again if a pending Supreme Court decision on preferential access to a local iron ore mine goes against it.
“They didn’t come here because of their love of India,” said Rakesh Arora, a metals expert and head of research at Macquarie Capital Securities (India). “Without the iron ore it would be cheaper to set up in China, where the capital costs are lower.”
A court in the state of Odisha has already ruled against POSCO on guaranteed supplies from the Kandahar iron ore reserve. Last month, the Supreme Court asked the central government for its opinion and it is expected to rule on the case this year.
Two senior sources at the POSCO project said the company would for now wait out the problems and it did not want to upset India, which it sees as an important long-term market.
The company has already scaled down the project because of the protests. Private farms and the village of Dhinkia, where the most fierce opposition has come from, are now excluded from the project’s first 4 million tonnes per year phase. The final goal is to produce three times that.
POSCO has also pushed its earliest start date back to 2017 after a tribunal suspended environmental clearance for the mill.
The project has split coastal communities in Odisha. One group of 52 families, for instance, says they were driven from their village by protesters after they criticized the movement’s Communist leaders. They now live in one-room houses on a small stipend paid by POSCO.
At the protest site people see things differently. Jhulia Das is an elderly grower of betel — a vine leaf used to wrap a heady mix known as paan that is chewed by millions of Indians.
Cultivating betel, along with coconuts, rice and cashews, provides a small but steady income for thousands of families living near the proposed mill site. Das fears losing that.
The state of Odisha owns the sandy land for the steel plant by the Bay of Bengal, but farmers like Das have cultivated betel there for years. POSCO is paying US$21,500 per acre (US$53,127 per hectare) for the land and a small monthly allowance to farmers until the plant opens, when they are promised jobs.
Odisha straddles India’s mining belt and holds a third of the country’s iron ore reserves, a quarter of its coal, half its bauxite and more than 90 percent of its nickel and chromite. The state accounted for about a fifth of all industrial investment proposals in India in the past four years.
Since January 2008, Odisha has attracted investment proposals worth US$210 billion from Tata, Jindal and POSCO, along with global heavyweights such as ArcelorMittal and Vedanta Resources. All have faced protests and delays.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts