Bangalore: South Korea's POSCO said on Tuesday it has decided to pull out of a $5.3 billion steel mill project in Karnataka due to political instability, delays in securing land and opposition from residents. The POSCO site is in Gadag district of North Karnataka region.
A Memorandum of Understanding (MoU) was signed in 2010 during the previous BJP rule and was a part of Global Investors Meet (GIM). But the local villagers are opposing land acquisition.
The newly elected Congress government wants to go slow as Chief Minister Siddaramaiah is worried about the problems land acquisition may cause ahead of 2014 Lok Sabha polls. The state government said it will have a re-look at the project.
The company will, however, go ahead with its steel mill project in Odisha.
(With additional inputs from Reuters)