SAIL earnings rise 10%, but Mittal makes waves

SAIL earnings rise 10%, but Mittal makes waves
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First Published: Wed, Jul 25 2007. 11 33 PM IST
Updated: Wed, Jul 25 2007. 11 33 PM IST
New Delhi: By the time steel tycoon Lakshmi Narayan Mittal arrived in a beige Mercedes outside Udyog Bhawan, news was already out.
The man on the Forbes billionaire’s list was planning a “courtesy call” on steel minister Ram Vilas Paswan at 4pm sharp. They were to discuss developments of ArcelorMittal’s two maiden 12-million tonne (mt) plant in Orissa and Jharkhand—which have been hit by delays in securing iron ore, a key part of steel-making.
Both Steel Authority of India Ltd and ArcelorMittal, the world’s largest steel maker, have stakes in the Chiria mines to make steel in Jharkhand, but Paswan said that there is sufficient ore for everyone.
Separately, SAIL and Mittal made news on their own on Wednesday. SAIL reported a 10% increase in profit to Rs1,525 crore for the first quarter of fiscal 2008, while revenue grew 8.2% to Rs8,346.40 crore compared with Rs7,713.5 crore in the same period last year. Mittal, meanwhile, had made an announcement that effectively doubled the company’s investment in India (see related story on page 5).
SAIL, which falls under the steel ministry, wants 2 billion tonnes of iron ore in Chiria, but the state is willing to part with only 1.3 billion tonnes, the matter is pending before a state court.
The meeting was no fight for resources, Paswan assured, saying there is sufficient iron ore for both Sail and Arcelor. “If we put the requirement of the companies together, it does not exceed 2.6 billion tonnes, and the state has 3 billion tonnes,” said Paswan. “This is not a Mittal vs SAIL issue. It’s the state which is the custodian,” he added.
ArcelorMittal has said it requires 600mt of iron ore in Jharkhand, roughly 20mt a year. It announced the Jharkand project in 2005, and Orissa last year.
The company has already committed $50 million to the Orissa government for the planned steel mill. Just eight days ago, ArcelorMittal wrote to the steel ministry that 8,000 acres of land will be required for the Orissa project.
Land has been identified in Keonjhar district; 6,000 acres will be reserved for the steel plant and 1,000 each for building a power plant and a township.
In Jharkhand, Mittal wants some 10,000 acres and has identified two places, but not committed any money so far. Hatch Consultancy has been hired to conduct a survey.
Emerging out of the car in a light brown suit, pink shirt, a dark tie, and a gleaming blue sapphire in his middle finger, Mittal avoided the eyes of journalists and quickly skipped up the stairs to the second-floor office energetically. “We will take advice and support,” Mittal turned around and announced airily.
It was not clear whether the meeting was meant to take place behind closed doors, but reporters followed Mittal into the room anyway.
He was accompanied by his Wharton graduate son, Aditya Mittal, now the company’s chief financial officer, and Sudhir Maheshwari, executive vice- president at ArcelorMittal. The event became a strange affair of pleasantries, hand slapping and endless talk for 40 minutes—in full public view. Both Mittals had Indian flags pinned on their suits.
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First Published: Wed, Jul 25 2007. 11 33 PM IST