| Sinosteel will initially invest $500 million in the planned 5 million tonne plant in Jharkhand, the company's India Managing Director Hong Sen Wang said from New Delhi. The total investment, the biggest in India by a Chinese company, will be made over eight years, he said today. |
| Delays in allocating land and mining permits have held up construction work on $21 billion projects announced in India by Arcelor Mittal and South Korea's Posco. Sinosteel is betting its 16-year-old relationship with the South Asian nation may help it secure approvals faster than rivals. |
| "We are confident that there will be enough iron ore to support our plant," Wang said. "We have very good relations with many sellers in India for many years.'' Sinosteel has been buying Indian ore since at least 1991. |
| Arcelor Mittal Chief Executive Officer Lakshmi Mittal said on March 25 progress was slow in the company's proposed Indian mills. Mittal in December agreed to build a $9 billion plant in Orissa, after initially announcing a $9 billion, 12 million-tonne-a year plant in Jharkhand state in October 2005. |
| Posco, the world's fourth-biggest steelmaker, is yet to get all the land required for a $12 billion plant in Orissa because of opposition from some political parties and farmers' groups. |
| Construction work on the project, talks for which began in August 2004, was to begin last month. |
| Meanwhile, steelmakers are not deterred by such delays as demand in Asia is growing faster than in Europe and North America. Steel usage in India is forecast to rise 7.7 per cent a year from 2010 to 2015, almost twice the 4.2 per cent global rate in the same period, according to the International Iron & Steel Institute. |
| "Foreign companies investing in India are willing to put up with some delays as long term benefits of such investments will far outweigh such irritants,'' said Dipak Acharya, who manages about $19 million at BOB Asset Management in Mumbai. |
| Sinosteel may next month sign an accord for the project with the Jharkhand state government, Wang said. It expects to get rights to mine 300 million tonne of ore for 30 years. |
| "It is clear that there is a market here to be tapped,'' Wang said. Sinosteel will sell as much as 70 per cent of its production in India, he said. |
| The eastern states of Jharkhand, Orissa and Chhattisgarh account for 70 per cent of India's coal reserves and 55 per cent of its iron ore, according to McKinsey & Co. |
| Ties between China and India, which fought a war in 1962, have been improving in recent years with high-level government meetings and pledges to boost trade. Still, billionaire Li Ka-shing's Hutchison Whampoa had its bids for Indian port projects rejected in August 2006 on national security grounds. The two have also been competing globally for energy resources. |
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