ArcelorMittal, JSPL seek MoU renewal for Orissa projects

World's largest steel maker ArcelorMittal and Jindal Steel and Power Ltd (JSPL) have requested the Orissa government to renew the memorandum of understanding (MoU) signed with the state for their proposed investments.

In its letter to the state steel and mines department, JSPL pleaded for increase of the MoU validity period by another three years after it lapsed in November 2011. Similarly, ArcellorMittal has applied for extension of its MoU by another five years starting from December 2011, when it expired.

ArcellorMittal expressed its commitment to invest in the state and said since it had got several statutory approvals to build its steel plant along with water use permit, it deserves to be given more time. “After the signing of the MoU, project activities have made progress in multiple dimensions, albeit, at a slow pace, on account of a large number of complex and time-consuming processes. At the same time the company remains committed to continue its presence in Orissa,” Sanak Mishra, vice president of the company's India project said in the request letter.

The Luxembourg-based steel major had signed a MoU in 2006 for setting up of a 12 million tonne per annum (mtpa) steel plant and a captive power plant at Patna in Keonjhar district at an estimated investment of Rs 40,000 crore. But it has not been able to make any progress on the project because of stiff opposition of local villagers to the land acquisition process.

As per the MoU, the project needs around 8,000 acres of land. The state-owned Industrial Promotion and Investment Corporation of Orissa Ltd (Ipicol) had approved 7, 003 acres of land for the project and an additional 750.58 acres for the plant township.

Out of the approved land size, 2,583.53 acres are with the state government with the balance 4,419.18 acres belonging to private people. The villages where the land is to be acquired for the steel plant are Chilida, Angikala, Chemana, Nuagaonbalabhadrapur, Raikala, Dharuapada, Kimirdapasi, Bhringaraj, Birudipusi, Padmakesharpur, Kodakhemana, Bradaungua, Jamunapasi and Padmapur in Keonjhar.

Apart from problems in land acquisition, the Lakhsmi Mittal controlled enterprise, which has got approval to use a coal block, has pointed out bureaucratic procrastination in granting captive iron ore mines lease as a cause for delay in taking forward the project. “Barring one application, all the rest (six) applications duly submitted at the district level are lying at the office of Director of Mines, Bhubaneswar since January 2009,” the letter said.

Meanwhile, Naveen Jindal-promoted JSPL requested the government to extend its MoU citing progress achieved on the construction of its proposed 6 million tonne steel plant at Angul. JSPL has already commissioned its first unit of captive power plant (CPP) with 135 Mw capacity, out of its proposed 900 mw plant and has also recently started its plate mill, which can produce 1.5 million tonne a year. “All the balance facilities of the 2 million tonne capacity steel plant will be ready for production progressively by June 2012. The complete 6 million tonne capacity steel plant is expected to be commissioned by the end of 2014,” the letter from JSPL said.