ArcelorMittal's $6.5 bn Jharkhand project hangs in balance

The fate of ArcelorMittal's 12-million tonne, $6.5 billion steel project in Jharkhand appears to be hanging in the balance as a new clause has been put up by the company for which there is no approval yet, state government officials said here on Friday.

The second stage of the memorandum of understanding (MoU) between Mittal steel and the Jharkhand government was proposed to be signed on Friday. But the company representatives did not turn up for the signing. Along with Mittal, Bhushan Steel representatives also did not turn up to sign another MoU.

Three MoUs were to be signed but only Vedanta executives turned up.

"Mittal steel has come out with a new clause. We are yet to get the requisition for the new clause. We will initiate process once we get the written requisition," said K. Ravi Kumar, director of the Jharkhand Industries department, without spelling out what the clause was.

"Bhushan steel is yet to come with a new date. The director of Bhushan steel is not in Ranchi."

But some government sources said Mittal steel was not showing interest in the steel plant due to the slump in the sector. The company officials here could not be reached over phone, despite several attempts by IANS to get their version.

The company had first signed the pact with the state government in 2005 for the 12-million tonne steel plant at an investment of Rs.40,000 crore. This MOU expired in 2010. The second-stage MOU was proposed on May 6.

Due to land acquisition problems, Mittal Steel in the past could not make much headway with the project. It was allocated iron ore mines at Karampada village. This apart, the state government also gave a prospective license for mining.

But the allocated coal block was cancelled.

The Mittals had also identified a site on the border of the Khuti-Gumla districts for the unit. But due to land acquisition problems, they decided to shift to Bokaro. When the MOU was signed in 2005, the company was also eyeing Chiria iron ore mines.

Again this was opposed by the state-run Steel Authority of India, which was awarded the mines.

--IANS

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