POSCO to start work on giant Indian steel plant next month

The protests have been loud and sometimes violent, but giant South Korean steelmaker POSCO is confident opposition will fade when work begins on its massive Indian plant next month.

After a lengthy stand-off with aggrieved local villagers, preparatory work will start on the 12-billion-dollar project in the eastern state of Orissa within weeks, a company spokesman told AFP.

Construction will begin early next year and the first phase of manufacturing in 2011, bringing thousands of jobs for local people, he said.

The project represents India's largest foreign direct investment, dwarfing the 2.9-billion-dollar Enron power plant in Maharashtra.

"The morale of the company is high. Once activities start, the rest of the villages opposing the project will also come around," company spokesman Shashanka Pattnaik told AFP over the weekend.

Feelings have also run high among thousands of residents facing eviction from the 4,004 acres (1,600 hectares) of coastal district earmarked for the plant.

In May, protesters briefly kidnapped three POSCO employees and held them in a barricaded village before releasing them. "Our demand is that POSCO gives us in writing that it will not set up its plant here," Anti-POSCO campaign leader Abhoy Sahu told AFP at the time.

Tensions rose in April when 500 police were dispatched to the Jagatsinghpur district, shortly after security forces shot dead 14 protesters against a chemical plant in nearby West Bengal. Amid the controversy POSCO, the world's fourth largest steelmaker, has struggled to acquire the land it needs and currently owns just 193 acres. But it hopes to buy another 300 acres soon, apart from the 1,135 acres it has already been promised by the government.

AFP