Orissa could be on the cusp of a new era of industrialisation with the state government considering proposals for Rs 122,000 crore (Rs 1,220 billion) in investments, mainly in steel, alumina and power sectors, official sources said.

Work on projects worth Rs 30,000 crore (Rs 300 billion) had already commenced, they said.

The proposed investments included Rs 39,000 crore (Rs 390 billion) in steel and power projects to be set up jointly by South Korean steel major Posco and mining giant BHP Billiton of Australia, Rs 20,000 crore (Rs 200 billion) petrochemical complex to be developed by the IOC, a Rs 18,000 crore (Rs 180 billion) mega power project and a six million tonne steel plant proposed by Tata Steel with investment up to Rs 15,000 crore (Rs 150 billion).

Orissa has huge deposits of iron ore, thermal grade coal and bauxite to attract such industries. As per the government policy, mineral deposits could be leased to companies only if they decided to set up plants in the state.

The sources said the Australia-South Korea joint effort would include a steel plant, which is likely to be located at Duburi in Jajpur district, a power plant, development of iron ore mines, and a port at Dhamra.

Billiton proposes to set up a metallurgical coke plant, co-generation of power, a ferro-manganese unit, an iron ore beneficiation plant and an alumina refinery. Posco's plans include a three million tonne steel plant to be expanded to ten million tonnes later.

The memorandum of understanding between the two companies and the state government was expected to be signed by December next, the sources said, adding a delegation of the firms had recently met the Chief Minister Naveen Patnaik to discuss the projects.

Cho Sang Sik, executive vice president of Posco, and Peter Beavan, chief development officer of BHP Billiton, led the delegation.

Tata Steel, which had acquired land near Gopalpur to set up a shore-based steel plant in 1997 but shelved the project later due to slow pace of development of Gopalpur port and a resistance movement by local people, has decided to build a six million tonne plant at Duburi.

"We have applied for land and this time we want to develop our own infrastructure," Tata Steel chief B Muthuraman said in Bhubaneswar.

The infrastructure included development of the Dhamra port and a railway line between Dhamra and Bhadrak. In the first phase, the investment would be Rs 1,500 crore (Rs 15 billion), he said. The project is part of Tata Steel's plan to reach 15 million tonne capacity by 2010.

A thermal power project was likely to come up at Hirma near Jharsuguda with investment of Rs 18,000 crore, the sources said.

Other major likely investments included Rs 4,500 crore (Rs 45 billion) each by Jindal Steel and Essar Steel on 2.5 million tonne per annum (mtpa) capacity steel projects and expansion of central sector National Aluminium Company Ltd with a Rs 4,000 crore (Rs 40 billion) investment, the official sources said.

Three other alumina refineries are proposed to be set up in Koraput and Kalahandi districts at a total cost of Rs 12,000 crore (Rs 120 billion).

Visa Steel and Ashok Magnetics have planned one mtpa steel plants with investment of Rs 2,000 crore (Rs 20 billion) each, while the IB Valley Thermal Power project is being expanded by adding two units of 250 mw each and would cost Rs 8,000 crore (Rs 80 billion).