"Final approval is accorded to the state government for diversion of 1,253 hectares of forest land in favour of POSCO," Environment Minister Jairam Ramesh said in a statement. Mr Ramesh said the approval was conditional on POSCO regenerating an equal area of forest in a spot chosen by the local government of Orissa, and is mandated to pay for the land it will acquire for the project.
To be built in the eastern state of Orissa, the steel plant has been strongly opposed by citizens since 2005 because of the farmland and forests that would be affected by the project. Mr Ramesh said: The plant had "considerable economic, technological and strategic significance, and at the same time, laws on the environment and forests must be implemented seriously."
Posco's operations has been in the doldrums because of rising raw material prices dragging its first quarter profit by 33 percent. Net income fell to 927 billion won ($858 million) in the three months ended 31 March 31 from a revised 1.37 trillion won a year earlier, the Pohang, South Korea-based company said in a regulatory filing in 24 April.
According to Nomura Holdings Inc. and DBS Vickers Securities (Singapore) Pte, Posco will benefit in the reconstruction to be conducted by Japan in the coming months
