New Delhi: The Indian unit of Arcelor Mittal is ready to invest $9 billion (Rs39,748 crore) to set up a steel plant in India’s Jharkhand state if supplies of iron ore can be guaranteed, a top company official said on Tuesday.
“After getting reasonable assurances for the mines, we are ready for investment,” Sanjeev Sengupta, director at the India office of the world’s leading steelmaker, told Reuters.
Mittal signed an initial agreement with Jharkhand’s state administration in 2005 and has since been working out the details, including the supply of raw materials.
Sengupta said the company would need 600 million tonnes of iron ore over the next 30 years.
In December, another Indian state, eastern Orissa, cleared a separate proposal by the firm to invest in a Rs400 billion project in the mineral-rich region of Keonjhar.
A Jharkhand state government official told Reuters 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 prominent state-owned steel maker SAIL.
Mittal representatives were likely to meet the state government soon, and top-level meetings would follow, the official said.
He said a team of top federal and Jharkhand state bureaucrats met on Monday to discuss mining leases which could be offered.
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 a further four-and-a-half years.
The company may also build a 2,500 MW power plant to provide electricity to the steel unit.
Steelmakers 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 percent 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. REUTERS