ArcelorMittal exit not to affect investment climate, says Odisha

There was no pro-active initiative from company to take project forward during last four years

The decision of world’s top steel maker ArcelorMittal to pull out of Odisha is a one off case and will not affect the process of industrialisation in the state, said the government officials today.

“The decision (of ArcelorMittal) will not affect any other projects in the state. Other steel projects such as those of Tatas, Bhushan and Posco are making steady progress and the process will continue,” said Jugal Kishor Mohapatra, the chief secretary of Odisha government.

He said, the government is not surprised by the development as there was no pro-active initiative from the company to take the project forward during the last four years.

Two officials of ArcelorMittal, after meeting the chief secretary on Wednesday, had requested him not to renew their Memorandum of Understanding (MoU) with the state government. The company had cited delays in land acquisition and grant of mining lease for their decision to drop the project plan.

The government passed on the buck to the company saying it was purely a business decision of the company.

“Due to some special problems the project couldn’t move forward. There were some land acquisition issues. As the project was not progressing, the government couldn’t recommend captive mines for the plant. The decision to withdraw from the project was company’s own commercial decision. May be it was because of the present market conditions,” added Mohapatra.

ArcelorMittal had initially entered into an MoU with the Odisha government on December 21, 2006, for a 12 million tonne integrated steel making facility and a captive power plant, at an estimated cost of Rs 40,000 crore. This was to come up at Patna in Keonjhar district. It did not make progress because of stiff opposition from villagers to land acquisition.

The company said, it had achieved important milestones such as completion of a feasibility report, environment impact assessment study and other relevant technical assistance reports apart from holding eight gram sabhas. The company was supposed to hold such gram sabhas in 15 affected villages, but could not complete the process due to people’s opposition.  

Out of its seven applications for iron ore mine leases at different places, six remained unprocessed since 2009, sources said.

The government said, though the chapter is closed for the time being, if the company approaches with a fresh project in future, the proposal might be considered.