New Delhi: ArcelorMittal, the world’s largest steel maker, is likely to overshoot the 2012 deadline to complete the $20 billion India project by nearly two years due the global economic downturn and delays in securing raw material resources and land.
“We can see (the projects) being delayed by at least two years because of the global financial crisis and delays in securing mining rights, land and other regulatory approvals,” ArcelorMittal India CEO Vijay Bhatnagar said.
The company was earlier planning to start each of its 12 million tonnes integrated steel plants in Jharkhand and Orissa by the first half of 2009 and complete the same by 2012.
However, with industrial downturn taking a toll on steel demand and the company not yet comfortable with raw material resources it has secured so far, it sees the India projects being delayed to 2014.
In a regulatory filing to the US Securities and Exchange Commission also, the L.N. Mittal-led company said the “timing and scope of implementation of the (India) project is currently under review”.
“Project implementation to date has consisted primarily of detailed reviews and securing assess to a small portion of necessary raw materials,” the steel major said.
For its Jharkhand project, ArcelorMittal has been alloted Karampada iron ore mines with a reserve of about 65 million tonnes, while in Orissa it is yet to make a headway.
The company’s total iron ore requirements for both the plants would be about 1,200 million tonnes over a span of 30 years.
For land, the company has requisitioned around 11,000 acres from the Jharkhand government and 7,750 acres in Orissa.
As per standard practice in the steel industry, it takes nearly 18 months from the date of MoU signing to complete the detailed project report (DPR) and four years thereafter to commission production at a new steel plant.
For both its projects, ArcelorMittal had roped in M.N. Dastur of Kolkata as the consultant for preparing the DPRs. The steel major had inked a Memorandum of Understanding with the Jharkhand government in 2005 and a year later with the Orissa government.