After struggling to get clearance for his company's proposed $20 billion investment to build two steel plants in India, ArcelorMittal chairman and CEO Lakshmi Mittal has admitted that it is not easy to set up a new plant in the country.
After discussing the company's financial results for the first quarter of 2009, Mr. Mittal told reporters, "We realize that it is not easy to do greenfield projects in India." Admitting that progress on each of the 12-million-mt projects in Orissa and Jharkhand has been "pretty slow" in terms of infrastructure and government approval, Mr. Mittal said the company would continue to monitor the situation as it does not intend to create over-capacity amid slackening demand.
Amid waning steel demand and delays in getting approval for mineral linkages and land, ArcelorMittal has delayed the start of its India projects by two years, pushing their inauguration to 2014.
"We are still in the process of acquiring land (and) assessing infrastructure availability. We are working with the governments on various approvals and acquisition of coal mining rights and iron ore rights," Mr Mittal said.
ArcelorMittal signed a memorandum of understanding with the Jharkhand government in 2005 for setting up a 12-million-mt greenfield project. A year later, it proposed a plant of similar capacity in Orissa. In Jharkhand, the company has been allotted the Karampada iron ore mines with reserves of about 65 million mt while in Orissa, the company has yet to make headway as regards raw material sources.