No headway in big projects for now: ArcelorMittal

Peeved at little progress made in its big-ticket India projects, the world's largest steel producer, ArcelorMittal, is now evaluating options of building small plants in the country with an investment of $1.5-3 billion each.

"...The company in the medium term intends to take a modular approach and also evaluate smaller projects in various Indian states, with potential individual investments estimated in the $1.5-3.0 billion range," ArcelorMittal said in its annual report for 2010.

The company said the decision is based on implementation challenges associated with large greenfield projects. It also wants to diversify its initiatives in India.

ArcelorMittal had announced plans to set up 12 million tonne per annum integrated steel plants in Jharkhand and Orissa at an estimated cost of over $10 billion each.

In June 2010, The company had inked a pact with the Karnataka government for a 6 million tonne per annum plant, with a captive 750 MW power plant, at an estimated investment of Rs 30,000 crore ($6.5 billion).

However, none of the projects could take off due to regulatory and other hurdles like land acquisition, raw material security etc. Faced with land acquisition problems, the company even had to shift the site of the proposed project to Bokaro in Jharkhand from Khunti-Gumla, .

"Implementation of these projects has been delayed for various reasons, including challenges relating to securing necessary mining rights, land and construction permits and regulatory approvals," the company said.

Early this month, ArcelorMittal chief LN Mittal had said that it was difficult to predict when any of the projects would take off.

"We are as anxious as anyone else that we should make progress in our Indian projects... We cannot predict when can we start production... We cannot predict when we will have the first steel plant commissioned," he had said, while announcing company's annual results for 2010.

Regretting that ArcelorMittal has not even reached the stage like Posco, which got Environment Ministry's conditional clearance on January 31, Mittal had also said that "we are still to see that the clearance is a clearance or still lot of steps need to take it forward".

All necessary steps related to land acquisition for the Karnataka project have been completed, and it is in the process of applying to secure mining leases and obtain environmental approvals, the company said.