ArcelorMittal can't wriggle out of commitment: Steel Minister

Last Updated : 27 October 2010, 10:17 IST
Last Updated : 27 October 2010, 10:17 IST

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"... whatever commitment they made earlier, on the basis of which they have been given mining leases or were promised that they would be given mining leases, they should fulfil those promises. ..else withdrawal of mining leases could be a logical consequence," Steel Minister Virbhadra Singh told PTI.

He was commenting on ArcelorMittal's announcement that it would pursue small projects in India now, instead of pushing the two mega 12 million tonnes in Orissa and Jharkhand at a total investment of Rs 1 lakh crore.

ArcelorMittal CFO Aditya Mittal has said the company plans small plants for faster execution and larger footprints. However, the company added that this would not mean shelving of the bigger projects and those would be taken up later.

The world's largest steel producer had earlier proposed to set up Rs 1 lakh crore worth steel plants with annual production capacities of 12 million tonnes per annum (MTPA) each in Jharkhand and Orissa.

Facing delays in two mineral-rich states, ArcelorMittal had earlier this year announced setting up 6 MTPA unit in Karnataka at a cost of Rs 30,000 crore.

Singh debunked the steel producers contention that bureaucracy, corruption and other procedural delays had impacted the project, saying that in any major greenfield project some time is taken and government is doing everything that it has committed to.
However, Ministry sources said that real reason for the change in the Almeta's stance was due to its overspreading of resources for acquisition at a time when the slowdown in Europe was impacting its both top and bottom lines.

Asked that ArcelorMittal Chairman and CEO L N Mittal had criticised the Indian government for red-tapism and corruption and had cited these for delays in launch of the projects, Singh said, "I think whatever difficulties they had in India initially were addressed."

On regulatory bottlenecks and protests against land acquisition, he said the the same were state subjects and Centre can act only as a facilitator.

"There is some delay but that will take off. Mines leases are ultimately granted by state governments, land acquisition is done by the state government. Relief and rehabilitations is done through the state governments. Centre only acts as a facilitator," he said.
Going ahead with the new strategy, the firm may also look at acquiring small units in India and was reportedly in such talks with at least a dozen firms.

Published 27 October 2010, 10:02 IST

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