Mittal seeks ore guarantee for $9 bln Jharkhand plant http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-02-20T175429Z_01_NOOTR_RTRJONC_0_India-288476-1.xml
Tue Feb 20, 2007
By Biman Mukherji
NEW DELHI (Reuters) - The Indian unit of Arcelor Mittal is ready to invest $9 billion to set up a steel plant in Jharkhand if supplies of iron ore can be guaranteed, a top company official said on Tuesday.
Sanjeev Sengupta, director at the India office of the world's leading steelmaker, told Reuters the firm was looking for an assured ore supply of 600 million tonnes over the next 30 years.
"We are keen, they are keen and we have to reach a position where we get the iron ore," Sengupta said after meeting the chief minister of Jharkhand in New Delhi.
Earlier in the day, he had said the company was ready to agree the investment if it got "reasonable assurances" concerning access to ore mines. A state government official told Reuters that a follow up meeting was likely in about two weeks.
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.
Earlier another state official had 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 steelmaker SAIL.
He said state-run firms were usually given preference but the government had an open mind and would do "whatever is in (Jharkhand's) best interests". The official added that companies setting up steel plants were bound to be favoured when it came to obtaining mining leases.
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.
In December, Orissa cleared a separate proposal by the firm to invest in a 400 billion rupee ($9.06 billion) project in the mineral-rich Keonjhar region.
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.
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