NEW DELHI, August 8, 2008 (AFP) - India's Supreme Court on Friday cleared South Korean giant Posco's plans to build a 12-billion-dollar steel plant that has drawn huge protests from farmers angry about losing their land.

The plant in the mineral-rich eastern coastal state of Orissa would be the largest foreign direct investment in India since the country launched market reforms in 1991 and aims to create 18,000 jobs over the next decade.

Approval for the plant, initially agreed in 2005, was granted by a special environmental bench headed by Supreme Court Chief Justice K. G. Balakrishnan.

Plans for the plant have been dogged by problems since the pact was signed including strong opposition from farmers who accuse the Seoul-based company of robbing them of their land.

Posco hailed the Supreme Court ruling and said it would proceed swiftly with the project.

The company has a 'firm commitment to the project' and is 'determined to move ahead in terms of land preparation and construction activities at full speed,' said Posco India Senior General Manager Vikash Sharan.

In a separate decision, the court also approved British mining giant Vedanta Resources Plc's plans to mine bauxite on land considered sacred by tribals to feed its planned 900-million-dollar refinery in eastern India.