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Mittal's steel project in Karnataka to get first priority

Bangalore, June 3, 2010

World’s largest steelmaker ArcelorMittal will give priority to its steel project in Karnataka, as its two other similar projects in Jharkhand and Orissa are bogged down by land issues and other approvals, a top company official said Thursday.

"If we see that our progress in Karnataka is ahead of others, our steel project in this state will get the first priority," ArcelorMittal chief executive Lakshmi N. Mittal told reporters here.

As the company’s steel projects in the other two states have been hanging fire over the last five years, Mittal hinted that priorities would change depending on the approvals and market development.

"What is happening is priorities will change depending on approvals and market development. Once we have made progress in Karnataka ahead of others, we may start here first and then wait and see what’s happening in the other two states," Mittal said on the margins of the Global Investors Meet (GIM 2010).

Noting that progress on the steel projects in Jharkhand and Orissa was slow, Mittal said the company was facing a lot of issues in connection with land, environmental clearances and protests by civic bodies.

"There are lots of milestones to be achieved before we can say that we are happy with the progress in the other two states. In Jharkhand, we have started working on different land sites in the last few weeks," Mittal said but did not elaborate on the status of the steel project in Orissa.

On his maiden visit to this tech hub, Mittal signed an agreement with the state government to set up a six million tonnes per annum steel plant in the mining district of Bellary, about 300 km from here, at an estimated cost of Rs.30,000 crore ($6.5 billion).

"In Karnataka, we have already got the land allocation and we have been assured by the state government that other requirements will be processed speedily. That is why we believe that the progress here will be better," said Mittal.

Though the state government has allocated water for the proposed steel plant and a captive power plant at the site, the company is yet to have coal linkages.

"We have signed the MoU (memorandum of understanding) with the state government. We are at the preliminary stage of progress. The real progress has to be made now. We are also working with the state-run power corporation for the power project in joint venture," Mittal said.

On securing mining lease, Mittal admitted that its location was a problem and the company had not identified the mining site in the state.

"The mining location is a problem. We are in the process of working with the state government to get the mining lease. That is one of the processes, which have been initiated, but we do not have any license though the process has begun," he said.

The steel baron also agreed that the state had no control over the mines and it can only recommend to the federal government for granting license to the steel project.

Lauding the state government for giving approvals and allocating land for the greenfield steel project within six months of initiating discussions, Mittal said Karnataka had demonstrated a strong commitment to the steel project.

"I am happy and excited because since we have started our discussions with the state government, we have experienced very positive support and attitude of the administration," Mittal added.

In a bid to protect its mineral wealth from exploitation and check export of raw materials like iron one without value addition, the state government has made it mandatory for setting up a steel plant for allotting captive mines in its revised industrial policy of 2009.



NRI Lakshmi Mittal


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