POSCO in India: A can of bankster-worms – 1
by Arun Shrivastava on 22 Feb 2012 6 Comments

[I visited the POSCO battlefield in November 2011 and witnessed a war raging between banksters and financial fraudsters owned POSCO and the unarmed, helpless people of Dhenkia, Nuagaon and Govindpur. Much of the livelihood, environmental, governance and humanitarian issues have been covered by many writers very thoroughly, hence I focus on the global resource grab in collusion with local Government officials and the Police in this Part 1 of my two-part essay. In Part-2, I shall explain how local communities will be impoverished through what we call ‘policy-led poverty that creates and sustains environment-poverty nexus’, and it is based on field visit to three villages affected by POSCO project]

Resource grabs are done in two ways. When lawfully elected governments oppose, their nations are bombed into the Stone Age [Iraq & Libya] and when ‘legally’ elected governments, in collusion with anti-people banksters based in the US and EU, bludgeon the people [POSCO in India]. Globalism unnecessarily unravels itself in crude ways.

The Korean firm, Pohang Iron and Steel Company or POSCO, is now the Trojan-horse of the western banking and financial cartel; the Government of India and the Orissa State Government – civil administration and the Police – are directly overseeing that the company forcibly acquires people’s lands, and water and forest resources in blatant violation of Constitutional safeguards.[1]

POSCO’s Memorandum of Understanding [MoU] expired years ago, yet the Government of India, especially the Home Minister ‘Pope’ Chidambaram, with a history of involvement in India’s biggest financial scams and notorious for high end connections with global banksters, was in Bhuvaneshwar, ostensibly to review social programs, in reality to ensure that the people opposing the POSCO agenda fall in line or be brutalized, and they were. Abhay Sahu’s arrest was probably decided then. Chubby facilitator, former Environment Minister Jairam Ramesh, had fallen earlier, with scandalous environmental clearance to an expired foreign direct investment [FDI] MoU in an ecologically sensitive region.[2]

There is no standing MOU with POSCO to invest US$ 10.4 billion, the so-called largest single foreign direct investment in India. It means that on the basis of mere statement of intent by a multinational corporation the local Government has started a reign of terror. Local people opposing the project are being picked up by the Police, slapped with false charges, their properties destroyed and bail denied by the local courts. That, in short, is the story of POSCO in India.


The POSCO agenda is to:

-       Control a valuable iron ore mine and export ore, an increasingly scarce resource

-       Build a private steel mill with residences [known as COLONIES] for officers

-       Build a private port, barely five kilometers from a large publicly controlled Paradeep Port.[3]

-       Build a captive power plant to energize the entire resource-plunder regime, and

-       Divert river water to feed their steel plant and exclusive colonies

They falsely claim that their project will create 13,000 jobs; and the Indian Government also falsely claims that the project will create 40,000 direct and indirect jobs. In the process of such ‘job creation’ the project will displace 22,000 people from land based settled occupation and another 20-30,000 will lose sustainable livelihoods in neighbouring villages. Independent assessments show that a maximum of 17,000 direct and indirect jobs will be created causing a net job loss of 27,000. A small pocket of coastal India will become yet another pocket-borough of banksters.

What is POSCO?

That is the main question. What, not who? Confronted by strange animals people ask ‘What is it?’ not ‘who it is?’ One of Korea’s former gems was forcibly acquired by the banksters post-1996 East Asian financial crisis; it has George Soros’ hands all over. It wears a Korean mask with Western control just as Arcellor-Mittal [world’s No 1 in steel] and Vedanta [equally depraved Indian firm] wear the Indian mask. It is the third largest steel making company [4] owned and controlled by, among others:

The US based banksters and financial services firms that include: The New York Bank Mellon [recipient of US Government bailout [despite largest deposit bank with over US$ 1.2 trillion in assets under management and $25.5 trillion in assets under custody and administration; the master custodian for the TARP funds; hired by the Treasury to handle accounting and record-keeping for the program][5],

Berkshire Hathaway [implicated in insider trading], Transamerica Corp [also infamous for shady dealings], the Capital Group [fronts for rich individuals, one of largest & publicity shy investment firms], CalPERS [has relatively smaller exposure in POSCO but has immense influence from handling the pension fund, estimated at 20% of India’s GDP, of serving and retired California employees], and Liechtenstein and Luxembourg based tax-dodgers with funds managed by US and
European banksters.

The British and EU based banksters and financial services firms include: Barclays, Foreign and Colonial Investment Trust, Capital Research and Management [same as Capital Group above], Henderson Global Investors, Alliance Bernstein, Berkshire Hathaway, Citigroup, Fidelity, and Invesco, to name a few.   

BHP Billiton of Australia
, world’s largest mining company [also a Uranium mining major], was successfully sued by the indigenous inhabitants of Papua New Guinea for environmental destruction from Ok Tedi copper mine project. They are piggy-backing POSCO to squirm into iron ore mining in India.

With few exceptions, each has been implicated in financial fraud or violation of local and regional laws that safeguard human rights, governance and environmental issues.

Most of the banks and financial services firms holding stock in POSCO have lost money and have troubled balance sheets.[6] POSCO managers have also indulged in crimes, having brutalized company’s workmen in Korea. A
union member Ha Joong Keun was beaten to death by riot police, another suffered a miscarriage, scores of others injured as a result of police brutality, and about 25 workmen are serving jail sentence.[7]

Managers run the firm, not investors and owners, and managers do things as instructed… let us be clear on that. Korean managers presided over many public meetings which is mandatory prior to land acquisition. Without the concurrence of the majority of the members of a village council, lands can’t be acquired and that is the law of the land, yet lands are being grabbed by the police while POSCO managers quietly sip on Napoleon Brandy 1500 kilometers away safely in Delhi and Bombay.

Fact check

POSCO has applied for exploration permit but I was denied a copy or even a copy of the approval /recommendation for approval by officers in the Department of Mines, citing that the matter is sub-judice. The prospecting license [PL], according to Orissa Government officials, has not yet been given and that is another worm. POSCO was one of 121 applicants, but Orissa officials connived with POSCO to grant PL ignoring other bidders.

One competitor [Geomin Minerals and Marketing] filed a suit and the Orissa High Court, by its order dated 14 July 2011, set aside the ‘recommendation’ of the State Government. Usually in such cases the company which has lost seeks a review and files a review petition in the higher court. The decision of Orissa High Court should have been challenged by POSCO in the Supreme Court.

Amazingly, it is the Orissa Government that has filed a review petition in the Supreme Court, which shows that the Orissa Government is in collusion with POSCO and that can’t happen without the knowledge at the highest level in the Government which is the Prime Minister’s Office [PMO] in Delhi. The job of any Government is to enforce the laws that people make; Government has no business to support a dubious corporation at people’s cost in the law courts.  

In many developed countries exploration cost is tax-deductible, and in some countries [Canada for example] the cost is passed on to individual shareholders which they can offset against tax liabilities, a method known as Flow-Through shares [this is akin to subsidizing R&D cost]. Therefore, many of POSCO shareholders can set off the exploration cost against their personal or institutional income. No one knows how much they have budgeted for exploration. The project details are missing and no one is talking.

The price of iron ore in the Indian open market [i.e. untied price] is about $90 per tonne [1 metric tonne=1000 kg] whereas the international market price [IMP] is around US$150. Normally steel producers’ have long term contract with mine owner-operators and the landed cost of ore at present ranges between 177-182 dollars for 65% and around 140 for lump, including 10-12 dollar for extraction & freight and 12-14 dollars per tonne for shipping to Korea [these costs vary from country to country and by origin and destination].

POSCO has contracted ore purchase at Indian market price which gives it an additional margin of between 40 to 60 dollars per tonne. [8] The original MOU was signed for 600 million tonnes of iron ore which would give this company a free gift of 24 to 36 billion dollars against their total investment of around 10.5 billion dollars at current exchange rate that will shore up the tricky balance sheets of many investors including POSCO. If a private port is allowed under POSCO’s planned SEZ, it’d be physically impossible to monitor how much ore is being stolen.

The bailout sops will take other forms too. Note that they want an integrated project that includes mining of iron ore, steel making, export of Indian ore and import of Australian ore, diversion of water from rivers [competing with people’s needs for irrigation and drinking water], land at throw-away price, plenty of hidden subsidies along the value activities and tax-sops because POSCO has sought Special Economic Zone [SEZ] status where Indian laws are not applicable, not even when a common law crime is committed. [For example Nokia operates from an SEZ in South India and Nokia was excoriated by a Swedish environmental group for a number of violations].

Writing in Open Magazine, Jay Mazoomdar says, “POSCO gets this deal at a delicate time, when the national consensus – of the Government, Judiciary and Indian industry – is moving towards limiting iron ore exports to help the domestic steel industry. India is the world's largest iron ore exporter after Australia and Brazil. But in terms of per capita reserves, India has only 21 tonnes against Brazil's 333 tonnes and Australia's 2,000 tonnes. Various studies have estimated that business-as-usual will exhaust India's iron ore reserves anytime between 2025 and 2040.” [9] Lester Brown of the Worldwatch Institute has suggested iron ore could run out within 64 years based on an extremely conservative extrapolation of 2% growth per year. [10]

Financial experts’ view

Experts say that mining industry has faced major problem from economic downturn; steel industry is particularly affected and recovery is uncertain. Globally, the externalization of social and environmental costs of mining is causing major problems, a realization that should have come long ago. POSCO has not answered any serious question on its mining, steel making and captive port project. Yet it plans to expand overseas from its Korean base to ‘Ghana, Mozambique, South Africa and Zimbabwe because those countries hold abundant iron ore reserves’ and further across India and Pakistan. [11]

Its financial accounts show US$ 25-30 billion in questionable cash flows [literally volatile cash] between 2005 and 2010, or around 5-6 billion dollars per year with proportion of free cash flow below net income from stressed margins. [12] Yet, it has been pouring cash into acquisitions [that] may.… adversely affect its [short-term] earnings," and that is a reason it has underperformed as compared to the industry average. Therefore, on evidence, POSCO is in financial trouble and it appears that the troubled banksters are leaving no stone unturned to force the Indian Government to bail them out.

There are other views too

The financial analysis should be seen in the larger perspective. POSCO hides the true objectives of the banksters, the same banksters who print dollar bills in their private printing press. This worthless paper that is the world’s ‘reserve currency’ is not backed by legal commitment to redeem its value in anything of substance because in the last 20 odd years these banksters have cleaned up gold holdings of most major economies, including Fort Knox.[13] When the Federal Reserve can pass on $20 trillion to shore up failed banks, they can shore up POSCO too from the accounting perspective; a few billion here and there is small change. The real game is global resource loot.

Please note that just 50 firms, mainly bankers and financial services firms of which 45 are US or Europe based, control every aspect of global economy.[14] And these in turn are dominated by just two: the Rothschild and the Rockefellers. It is a known fact that ‘the Rothschilds control BHP Billiton and Rio Tinto directly, the two biggest global miners’ as well as Royal Dutch/Shell, BP and Bank of America. Laxmi Mittal and George Soros are alleged to front for the Rothschild. While Soros powers the spurious “democratic” and “civil society” putsch for change destroying economies, Mittal known as the Indian Deripaska [after Oleg Deripaska, a Khazar and a Rothschild lap dog], picks up mines and steel mills at cents to a dollar.

European analysts from former Soviet Russia, many with background in intelligence services, confirm that Mittal now controls most of former Soviet, East European and the South African iron and steel industry and is in Libya building a football stadium. The final aim in Europe is to sequester resource rich Siberia from Russia. According to them, the Rothschild “believe” that Siberia is a financial liability for the Russians. Closely observe the Soros game in Russia; a legitimate election is being peddled as Putin’s stolen election by Soros-engineered disinformation. The Khazars have old historical scores to settle in Russia and the time is opportune to complete the unfinished job.

What could be the bigger agenda of the insane Rothschild in Orissa? India’s mineral rich regions are also a liability: inhabited by extremely poor people [Kissinger, the Rockefeller lap-dog and the Rockefellers are related to the Rothschild, calls them ‘useless eaters’], much Maoist extremism, and inability of the government to function properly in these parts; theft of minerals by Indian politicians and criminals. Perhaps it is just a trial run, a pilot project. India is being primed for some serious surgery.

Absence of strategic thinking

Absence of serious strategic thinking is even more glaring in that the private port will give this globalist direct access to India’s strategic mineral heartland. The port can be effectively used for covert policing and civil disturbance operations in which both the US and NATO forces are past masters. The mining region of Central India is largely inhabited by aborigines [tribal groups] and the generic church in these parts is the largest recipient of donations from Europe and North America. Analysis of fund flows to the generic church and NGOs based on Home Ministry data points to major upheaval in resource rich regions of central India which some analysts fear may cause even bigger problems. That pattern needs to be watched carefully as large funds are being transferred to these parts and there is huge problem of extremism and armed conflict.

Hillary Clinton’s visits to India are essentially for ‘dishonest brokering’ of demands of her real employers and the Indian Government; poor female, because Obama had a better face. Obama’s assertion that the US has long term strategic interest in Asia and the Pacific is nothing new and that ‘interest’ has resulted in millions of dead Indonesians, Koreans, Japanese, Vietnamese, Laotians and Cambodians.

The US Government has now an office not connected with diplomatic or consular activities in many state capitals of India ostensibly to monitor the environmental issues, which is very convenient to gather vital information, and time civil disturbance. Halliburton, a notorious company which former US Vice President Dick Cheney headed briefly, provides security to the US Consulate in Mumbai. The Carlyle Group has recently established an office in Mumbai and they have been regularly hobnobbing with top military officials.

Hence, I have reasons to believe that the private port could prove to be the proverbial Achilles’ heel. The main problem at the moment in the three villages is from the port and many government officials have also questioned the logic for the port, although not openly, which is understandable. Other analysts have also arrived at the conclusion that if POSCO does not get the port, they may not invest in the mining or steel projects. The port is the key.

POSCO’s is a test case

POSCO is a test case in that it is controlled by the same banksters who are grabbing resources worldwide, paid for in toilet paper dollars. Toilet paper dollars are buying up India’s valuable assets. Prime Minister Manmohan, a former IMF executive, and Policy Tsar Montek Singh, a former World Bank executive, are both economic hit men, know the truth, and are backing India’s resource loot. They are loyal servants of the banksters, just as Hillary and Obama. 

Potentially this is the biggest resource grab after Afghanistan, Iraq, and Libya, unless Siberia supersedes. Afghanistan has been occupied by US and NATO for opium production [land], drug processing and shipping to Europe and North America [cash], and for its enormous mineral wealth [resources]. Iraq and Libya were grabbed for their energy resources; Iran is next. All three were made an example of the consequences for refusing to tow the Anglo-American elite’s lines.

At stake is the trillions of dollars amassed by hundreds of Indian politicians, bureaucrats and businessmen, now deposited in banks owned by the Rothschild and Rockefeller families.[15] India’s ‘democratic’ process too is at stake as the coloured revolution raises its ugly head. Poor Anna is not even worth a ‘Pai’ absent Soros. [16] People don’t figure in this equation.

Lessons to learn

Mining and large industries have never benefited local people because the value chain of mining operation does not allow integration with local economy and society and that fact starkly emerges in POSCO case too. It is for this reason that in every country there is mass opposition and often violent uprising against mining operations; similar problems are bound to occur in POSCO mines.

The second problem is that large mining operations cause massive deforestation and loss of fragile ecosystem that support the local economy. Water pollution from mining operations can affect thousands of miles of farmlands far away from mining area that are part of the flood plains of rivers along which mining is done. Even the Chinese government has realized this, closing down cement plants and mining operations in fragile Tibet. And this problem has hit Orissa farmers too where local experts found 1 kg of fine mine tailing in 1000 kg of river water from the same region where POSCO will start its mining operations.

The third issue is that we don’t need FDI in steel making; Indian engineers have great expertise in
mining and steel making. The desperate moves by POSCO to forge joint-ventures with Steel Authority of India, a publicly held steel major, will actually undermine India’s competitive advantage in steel.

The fourth issue which should concern everyone around the world is transparency of financial transactions in large strategic projects; it is in the long term interest of investors, financial services firms and banks to come clean with good quality information, instead of fobbing off legitimate questions and ignoring serious concerns of the people. The writing is on the wall but some folks opt to remain blind.

To be continued…


[1] http://www.tsr.net.co/profiles/blog/show?id=6324104%3ABlogPost%3A40137&commentId=6324104%3AComment%3A39860&xg_source=activity

[2] http://www.minesandcommunities.org/article.php?a=10689


[4] http://www.worldsteel.org/statistics/top-producers.html




[8] See IODEX, here http://www.platts.com/DailyIronOreBenchmark

[9] ‘The Great Iron Ore Heist’; Mazoomdar, J; Open Magazine; 18/6/2011

[10] Brown, Lester Plan B 2.0, New York: W.W. Norton, 2006. p. 109


[12] http://www.smartmoney.com/news/on/?story=ON-20111119-000002&cid=1244&source=TheMotleyFool

[13] http://deanhenderson.wordpress.com/2011/01/05/the-house-of-rothschild/

[14] Vitali, S., Glattfelder, J.B., and Battiston, S.; The network of global corporate control; July 2011; published here: http://arxiv.org/abs/1107.5728; see Table S1, page 33

 [15] http://www.thepeoplesvoice.org/TPV3/Voices.php/2011/09/29/economic-hit-man-of-india

[16] The reference here is to India’s old currency system of Rupiah, Anna, and Pai. 16 annas equalled a rupee, and 12 pai made up an anna.

Arun Shrivastava is an accredited management consultant and highly experienced researcher and writer. He is South Asia correspondent of Salem-News of Oregon, USA and a regular contributor to Global Research. His email is: arun1951@gmail.com

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