ArcelorMittal to build small steel units in 3 states: govt

Global steel major ArcelorMittal will build smaller plants, each of 3 million tonne capacity, in Jharkhand, Orissa and Karnataka, as per the company's investment proposals with the government.

As per "investment plans, present progress and the schedule of implementation," the company is likely to commission these plants in Jharkhand and Karnataka by 2015, while the Orissa project would go on stream a year later, Minister of State for Steel A Sai Prathap said in a written reply to the Rajya Sabha.

However, the company remains committed to a combined capacity of the steel plants of 30 million tonnes per annum (MTPA), he said without giving a timeline for them.

Besides, there are major proposals by leading companies like Tata Steel, SAIL, NMDC, Posco, Essar Steel and Jindal Steel to take the domestic steel sector capacity to about 172 MTPA through expansion as well as new plants, Prathap said.

The world's largest steel producer had entered into a pact with Jharkhand and Orissa governments in 2005 and 2006 respectively, to set up Rs 1 lakh crore steel plants with 12 MTPA capacity each, and a 6 MTPA unit in Karnataka at an estimated cost of Rs 30,000 crore.

Regulatory bottlenecks and protests against land acquisition for the project have delayed the mega ventures in Jharkhand and Orissa.

In the wake of the hurdles in the two states, the company last year entered into a pact with domestic steel firm Uttam Galva to mark its operational presence in India. In Karnataka it is in the process of acquiring land for a 6 MTPA project.

ArcelorMittal CFO Aditya Mittal had said last month that, to begin with, the company would set up small facilities in India to expand footprint.

Prathap said other major projects include 6 MTPA plant by Tata Steel in Orissa, likely to be set up by 2014. It would be besides a 2.7 MTPA plant in Chhattisgarh -- out of the proposed 5.5 MTPA, and a 6 MTPA project in Jharkhand by 2015, out of proposed 12 MTPA.

This is in addition to existing Jamshedpur facility in Jharkhand, the capacity of which is planned to be ramped up to 10 MTPA by 2011-12, from 6.8 at present.

He said Essar Steel's 6 MTPA and 3 MTPA projects in Orissa and Chhattisgarh respectively were likely by 2012-13.