New Delhi/Kolkata: The Indian arm of Arcelor Mittal Co. NV plans to commence construction on its first steel plant in India by the end of 2008 and has asked an engineering consultant to draft a detailed project report even as emerged as a frontrunner in securing the Serigarha coal block in Jharkhand, for a proposed 750MW power plant to support another mill in that state.
L.N. Mittal, chief executive officer of the world’s largest steel manufacturer, last week reaffirmed the company’s plans to build two 12 million tonnes (mt) plants, one in Orissa, another in Jharkhand.
The steel tycoon built his global empire through acquisitions, and India represents his first foray into building steel plants. The company hopes to sell steel in the domestic market by 2011.
The project reports and environmental management plan are expected to be delivered in 15 months, says Sanak Mishra, chief executive officer of engineering consultants, M.N. Dastur and Co.
The Rs40,000 crore Orissa project will be ready before the proposed mill in neighbouring Jharkhand, although Mittal signed a memorandum of understanding with the latter state in 2005.
In Jharkhand, Mittal had been eyeing the Chiria mines to source iron ore, a crucial ingredient in steel making.
However, amid fights with the state government and the Steel Authority of India Ltd (Sail), he turned to Orissa, also the site of a proposed steel plant by South Korean giant Posco.
“We are waiting for the state government of Jharkhand to announce its R&R (rehabilitation and resettlement) policy, before announcing our schedule for the project in the State,” Mishra says.
The company has shortlisted two sites, at Torpa and Saraikala, and the final site will be announced only after freezing the rehabilitation package.
If and when this happens, Mishra says, the timeline for this project too could be close to that of the Orissa plant.
“With project reports of the Orissa plant in hand, it will be easier and faster for us to move into the Jharkhand project,” he says adding that the synergies, technology and expertise brought by Arcelor, which Mittal Steel took over last year, will help deliver the projects in India more cost-effectively.
Already, Arcelor Mittal has begun securing the resources needed to make steel in Jharkand; it has said it needs 6.5mt of coal, for example.
In a stiff battle between state officials and the power ministry, which had proposed the names of CESC Ltd and Rashmi Cement Ltd for the block on Monday, Arcelor Mittal was finally recommended for clearance, according to a government official aware of block allotment who requested anonymity.
The screening committee, headed by coal secretary H.C. Gupta, narrowed the list from 745 to 45 for the 15 coal blocks. It is expected to meet after a week to finalize the list.
The 15 blocks, four of them located in Jharkhand, have a total reserve of 3.6 billion tonnes to support 18,000MW capacity.
More than 42 steel companies, including JSW Steel Ltd, Ispat Industries Ltd, Visa Steel Ltd, Uttam Galva Steels Ltd, had applied for the coal blocks to fuel their projects.
Besides Arcelor Mittal Steel, the committee has recommended Tata Steel Ltd for the Fatehpur block in Chhattisgarh for a 625MW plant.
Jindal Steel & Power Ltd, which proposes to build a 900MW plant, has been recommended for joint mining rights for the Mandakini block in Orissa along with Navbharat Power Pvt Ltd and GMR Energy Ltd.