The Indian unit of Arcelor Mittal is ready to invest $9 billion (Rs39,600 crore) to set up a steel plant in Jharkhand if supplies of iron ore can be guaranteed, a top company official has said.
“After getting reasonable assurances for the mines, we are ready for investment,” Sanjeev Sengupta, director at the India office of the world’s leading steel maker, said.
Mittal signed an initial agreement with the Jharkhand government in 2005 and has since been working out the details, including the supply of raw materials, for the proposed unit. Sengupta said the company would need 600 million tonnes of iron ore over the next 30 years.
In December 2006, the Orissa government cleared a separate proposal by the firm to invest in a Rs40,000 crore project in the mineral-rich Keonjhar region.
A Jharkhand government official said there was no problem in giving the Mittal group a mining lease, but said the firm was mainly interested in mines also being sought by state-owned steel maker SAIL.
Mittal representatives were likely to meet the state government soon, and top-level meetings would follow, the official said.
The Mittal proposal would be developed in two phases, each with a capacity of six million tonnes.
The first phase would be completed within four years, while the second would be up and running within four-and-a-half more years.
The company may also build a 2,500MW plant to provide electricity to the steel unit.
Steel makers and mining firms have been drawn to India by its relatively cheap labour and the world’s third-largest combined deposits of coal and iron ore.
Mittal was the second foreign steel maker to make a move on India’s ore reserves with steel demand likely to boom in step with India’s fast-growing economy, which is expected to expand by over 9% in the year to March-end.
In June 2005, South Korea’s Posco signed a deal for a $12 billion steel project in Orissa, a record foreign direct investment for India, but problems acquiring land from local farmers have delayed construction.