London: India-born billionaire Lakshmi Mittal has seen his net worth plummeting in the past one year by a whopping £16.9 billion (over Rs1,20,000 crore) -- an amount which is well in excess of the entire cost of his two proposed steel plants in India.
Dubbing him as the biggest loser of wealth in past one year, the Sunday Times annual rich list of wealthiest persons in the UK has pegged the net worth of Mittal, a British citizen and resident, at £10.8 billion (about Rs79,000 crore).
Mittal has, however, retained his title as the richest person in the UK with this massive wealth for fifth year in a row. However, the NRI billionaire, who runs the world’s biggest steel empire ArcelorMittal, alone accounts for more than one-tenth of the cumulative loss suffered by Britain’s 1,000 richest persons in their fortunes.
Although the figures for net worth for Mittal as well as others are notional values, the loss suffered by the steel billionaire exceeds by a wide margin the estimated investment of Rs80,000 crore proposed by ArcelorMittal for two plants in India.
Mittal has plans to set up two steel plants in India of 12 million tonnes each -- one in Orissa and another in Jharkhand -- with each of them estimated to cost Rs40,000 crore.
The slump in the steel industry, as also the grim scenario in the overall global economy, has not only led to a sharp slump in Mittal’s net worth, it has also forced the group to revise their operations and investment plans across the world, including India.
There have been reports that ArcelorMittal may halve the size and slash its investment for the first phase of its proposed projects in India due to a sharp decline in steel demand and the global economic slowdown. However, the group has reiterated its commitment to the final target of creating steel capacity of 24 million tonnes in India.
But, the world’s largest steel maker does see a delay of at least two years in commencing production from its proposed plants of capacity 12 million tonnes per annum (MTPA) in Jharkhand and Orissa each.
“Initially we were thinking of putting six million tonnes per annum steel plant in phase one. We may (now) put up smaller plants ... we could cut the size to 3 MTPA in each phase due to the slump in steel demand and other issues, including land acquisition problems in India. Investments could naturally come down in the same proportion,” ArcelorMittal India CEO Vijay Bhatnagar told reporters earlier this month.
He, however, clarified that overall plan to reach 12 MTPA capacity at each plant in Orissa and Jharkhand has not been changed.
Bhatnagar said that due to slow land acquisition for the projects and global downturn, the company would overshoot the 2012 deadline to commence production in India.