Calcutta, July 17: ArcelorMittal, the world’s largest steel-maker, has decided to pull out of Odisha, junking one of the three projects the company’s billionaire owner Lakshmi Mittal had proposed to build in the country seven years ago.
Officials of the company today met Odisha chief secretary Jugal Kishore Mohapatra to inform him that the company had decided not to progress with the construction of an integrated steel plant and a captive power unit in Keonjhar district.
The company, which has been simultaneously pursuing similar projects in Jharkhand and Karnataka, cited inordinate delays in land acquisition and the absence of captive iron ore mines for the pullout.
“Over the past seven years, we have invested considerable resources in this project. However, the delays related to land acquisition and allocation of captive iron ore blocks means this project is no longer viable. Nevertheless, we will continue to pursue our other two projects in Jharkhand and Karnataka, both of which are making steady progress,” Vijay Bhatnagar, executive vice-president of the management committee and CEO of ArcelorMittal in India and China, said.
The announcement comes a day after another global steel giant Posco put its Karnataka project on ice. The Korean firm had planned to build a six-million-tonne (MT) plant for Rs 30,000 crore.
Initially, ArcelorMittal planned to build a 12MT integrated plant in Keonjhar and had signed a memorandum of understanding with the Odisha government in December 2006.
“Since that day, ArcelorMittal has completed important milestones such as completion of a feasibility report, an environmental impact assessment study and other relevant technical reports, as well as holding eight gram sabhas (public hearings) and investing in a number of CSR projects,” the company in a statement said.
The Keonjhar agreement was signed within a year of the company signing a similar MoU in Jharkhand for another 12MT plant.
“Unfortunately, the project has faced significant external delays. Therefore, taking into account the current economic climate, ArcelorMittal has concluded it will no longer be pursuing its plans for a steel plant in Keonjhar at this stage,” the statement said.
Industry observers say only a handful of such projects, especially in the metal and alloy sectors, will see the light of the day, given the current impasse over land acquisitions and mine allocation.
Apart from Tata Steel’s Kalinganagar project, Naveen Jindal’s Angul and Electrosteel’s Bokaro plant, very few big-ticket steel plans have taken off despite investment proposals of huge amounts.
