Pohang Steel Company (POSCO)

A PESTEL FRAMEWORK ANALYSIS

BY: GROUP H/2

ASHISH CHAMRIA - 2018PGP070
KETAN SURI -
SHUBHAM AGNIHOTRI -
SUCHITRA MANDAL -
SONALIKA -
SANCHIT -

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 POLITICAL
Party In power-Biju Janata Dal

Things not done right.

× Biased towards Foreign Players. Did not consider domestic steel companies.
× Support for use of local goons to divide local people, false propaganda and attacks on
agitators as well as section 144 declared.
× MOU Signed with many loopholes including economic, legal and social.
× To be recognized as the state with the biggest FDI it was granting leeway to POSCO.
Opposition-Rashtriya Seva Dal, Communist Party India, Bhartiya Janata Party
 POSCO Pratirodh Sangram Samiti (PPSS) based at Dhinkia village spearheading the
movement against POSCO led by Abhay Sahoo and dominated by CPI.
 Ideological Differences in PPSS-Politicising the issue, as well not totally against the
project.
 POSCO Kshatigrasth Sangharsh Samiti –Conflict of interest as panchayat members part
of this were supporters of RJD.
 Bhita Mati Bachao Andolan, dominated by the Congress –Inactive
 Nav Nirman Samiti spearheaded by the Rashtriya Yuva Sangathan, the youth wing.

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 ECONOMIC

Generate Rs 29,760 crores of incremental gross annual output for Orissa including Rs
12,610 Crore for POSCO-India’s direct gross output

POSCO-India annual tax contribution (Rs 2,620 Crores) would be appx. 17.6% of
total tax revenue of Govt. of Orissa in 2016-17

The number of people who will be severely impacted directly or indirectly is to the
tune of 2.5 lacs, which far exceeds the employment generated

The govt. of Orissa made an agreement of providing mining rights for 600 million tons
for a royalty payment of Rs 27/tonne (in 2005) which is less than one percent of market
price of ore
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 SOCIAL

• 438 acre private land acquired from the locals

• People were forced to part with their land
471 FAMILIES DISPLACED
• The loss of forest lands translates directly to losses in livelihoods,
especially of Adivasi communities

• If built, the port would also directly affect the livelihood of the fishing
communities because the Jatadhari estuary serves as a breeding
LOSING THE ESSENCE ground for several species of fish.
‘PAAN, DHAN, MACCH’
• Crackdown on people resisting forcible eviction
• Impact on livelihood and monetary resources by loss of farming land

ALTERNATIVE PROVIDED • Had to face violence from own government

BY POSCO NOT UPTO THE • Degradation of the Standard of Living for Local People, and Impacts
MARK on the Environment

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 TECHNOLOGICAL
Comparison of Conventional BF vs Oxygen BF
• Blast furnace retain its lead for the foreseeable future, but
there may also be significant reductions in its energy costs
and environmental impacts. These improvements might
come about as a result of the use of “self-reducing” ore-
carbon briquettes made from concentrate and
inexpensive carbon-bearing materials. It might also be
possible to further intensify the smelting operation
through the use of oxygen and increases in top-gas
pressure.
• In far future, Oxygen Blast furnace may provide good
alternative to the traditional blast furnace if it solves its
thermal shortage problem and makes itself more efficient.
• Oxygen blast furnace (OBF) ironmaking process has the
potential to realize ‘‘zero carbon footprint’’ production

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 ENVIRONMENTAL IMPACTS

Captive Mining
Water Supply
Plant Area Port facilities for iron ore
Infrastruture
& coal
• Would affect • Threat to the • Dangerous effects • 12000 to 15000
cultivation of habitat of of the plant on the crore litres from
beetle and cashew endangered Olive Khandadhar hills river Mahanadi
in 7 revenue Ridley Turtles. affecting Bhuiyans. adversely
villages in impacting it.
Jagatsingpur • Pollution by waste
district. of iron ore mining
process and
• Also includes a transportation.
wide strip of land
classified as
“forest”

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 LEGAL

State policy did not entitled to more than 480 million tonnes for a 12-million tonne plant. Existing rules did not permit to offer
mining rights for more than 25 years.

The Land Acquisition Act of 1894 which is draconian and archaic continues to acquire private lands forcibly in the name of
public purpose even for private mining activities

PESA Act 1996 and the Samata judgment haven’t been implemented

According to the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights Act) 2006 the consent of
local people is required for this project to proceed.

On the 12th of October 2008 Abhay Sahoo leader of PPSS was arrested and charged with 25 criminal cases.

Mineral Policy of 1993 and the amendments made to Mines and Minerals Act of 1957 haven’t been approved & new Industrial
Policy in March 2007 is the major new change.

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Thank You