Luxembourg-based Arcelor- Mittal, the world’s largest steel maker, has said it is pursuing its new project investments in India, despite minor delays.
Apart from its recent strategic investments in Uttam Galva Steel, ArcelorMittal has two new projects coming up to manufacture steel, one each in Orissa and Jharkhand. The company had recently said there would be a two-year delay in commencing production in India, expected to be done with a total investment of $20-25 billion. The original start date for production, that was expected to be in 2012, was recently pushed to 2014.
In the presentations made ahead of the annual investors’ conference held simultaneously in London and New York, the company’s senior management said there has been some delay in securing mining rights in Orissa. And, applications for environment clearances and infrastructure allocation in Jharkhand were being processed.
“ArcelorMittal is still pursuing its Indian greenfield investments, despite slow processes extending project timelines,” Maheshwari said in his presentation.
The company said iron ore mines have been allotted in Karampada (65 million tonnes) and a coal block allotted in Seregarha in Jharkhand. While private land acquisition is to begin later this year, the state government has allocated 415 acres for the project. Resettlement plans for the local community have been prepared and will be made public soon, the company said.
The Orissa project is also showing progress, says the company. While a coal block has been allotted, there has been some delay in securing mining rights. Government land has been allotted and the process for acquiring private land is underway. A resettlement plan for this project has been given to the government.
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Despite the delays in these projects, the company said its recent investment in Mumbai-based Uttam Galva Steel has provided it an “immediate entry into the steel manufacturing sector in India.” Earlier this month, ArcelorMittal had announced picking up a 35 per cent stake in Uttam Galva, with a value of $560 million. Uttam Galva produces cold rolled steel, galvanised products, colour coated coils and sheets with an annual capacity of one million tonnes.
“It (Uttam Galva) is a good bolt on to the existing greenfield projects in Jharkhand and Orissa, providing an in-house consumer of HRC (hot rolled coil) from these projects,” the company said. This acquisition is also expected to provide an outlet for selling flat products from other ArcelorMittal plants in the interim. The group, through ArcelorMittal International, is expected to sell 1.6 million tonnes of steel in India this year though the import route. The company plans to make India a design and engineering hub through the ArcelorMittal Design & Engineering Centre in Kolkata.
ArcelorMittal believes US and European steel markets will not return to pre-crisis levels next year and developing countries should drive growth.”Markets are not expected to normalise in Europe and the US in 2010,” Chief Executive Lakshmi Mittal said in his presentation to investors today. Mittal said the emerging world and China were equally important and would represent nearly 80 per cent of the global market in 2009.