Hopes to complete land acquisition in first few months of 2011.
As a part of its revised plan to focus on smaller plants, ArcelorMittal has split its proposed 12 million tonne per annum (mtpa) steel plant in Jharkhand into two. The world’s largest steelmaker has decided to set up a 6-mtpa plant at Petarwar in Bokaro district. The company will look for a separate location in Jharkhand itself for the remaining capacity.
“As per the revised strategy, we want to start production as soon as possible; therefore, we are looking at developing smaller steel plants,” the company’s India spokesperson told Business Standard.
The company has started acquiring 2,500 acres of land in Petarwar for its plant. It hopes to acquire 1,000 acres by this December and the rest by the first few months of 2011. The company, according to its original memorandum of understanding (MoU) with the state government, had asked for 11,000 acres of land for its 12-mtpa plant.
It said the 6-mtpa plant would be built in two phases of 3 mtpa each. “The land acquisition has already begun and we are targeting to complete the process by early 2011. The plant construction should start by mid-2011. The steel production at the site from the first phase of 3-mtpa is expected to commence in 2013.”
Earlier this week, Chairman and Chief Executive Officer L N Mittal told the Financial Times in Tokyo that: “My plan is now to have two to four sites rather than concentrate everything on large plants.”
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Land acquisition for such a mega plant is time-consuming, as the company is in talks with land owners directly without any government intervention. The company maintains that once land is acquired, the plant construction will begin in full swing, as the company is flush with funds. Moreover, it was delay in acquiring the 11,000 acres in one go that prompted the steelmaker to alter its strategy and go for smaller modules.
The spokesperson said the state government itself advised the company to look at the land in Petarwar as there was enough water to set up at least a 3 mtpa plant. “Our feasibility report shows a larger plant can be set up at the site and, therefore, we have started to acquire 2,500 acres of land in the region. Bokaro site will see a 6-mtpa plant from ArcelorMittal,” the spokesperson said.
The company maintains that its MoU with the state government for the 12-mtpa plant still remains in terms of capacity. The steelmaker said it would start looking for a second location for the remaining 6-mtpa capacity in due course of time. “The feasibility study is continuously updated and if it shows that this plant at Bokaro can be scaled further up with all the necessary requirements like water, etc, fulfilled, we might increase the plant size.”
The company, however, hasn’t planned smaller steel mills in Orissa so far. It said, “Since in Orissa, we have completed (discussions ) eight out of the 15 gram sabhas we were supposed to, there is no plan at the moment to split the 12 mtpa production into smaller plants.”
The steelmaker is looking to set up another 6 mtpa plant in the Bellary district of Karnataka.