Posco may scrap planned $12-billion steel project.

South Korean steelmaker Posco could scrap plans for a $12-billion project it had agreed to set up in Odisha a decade ago, following a new law that makes it costlier to source iron ore for the plant, a company spokesman said.

The 2005 project to set up a steel plant was billed as India's biggest foreign direct investment at that time but it has encountered a series of delays. The company waited about a decade to acquire land for the proposed 12-million-tonnes-a-year steel plant, owing to opposition from local tribal groups.

Due to a mining law enacted in March, the company will now also have to buy a mining licence in an auction. Initially, the Odisha government had promised to help the company secure the licence for free.

BS