ArcelorMittal announces steel project in Orissa

The ArcelorMittal, world's largest steel producer has been provisionally allotted 7,750 acres of land by the Orissa government to construct a steel project in the state.

Earlier on Sunday ArcelorMittal announced that it has been awarded a license from the Industrial Development Authority (IDA) of Egypt's Ministry of Trade and Industry to construct a steel plant in Egypt.

The steel company was allocated 6,000 acres of land for the 12-million tonnes steel plant and a township in the state and 1,000 acres for a 1500-megawatt power plant as told to reporters by Sanak Mishra, CEO of the company’s India unit on Monday.

The company has acquired a coalmine on lease with a capacity of 650 million tonnes along with four other units and simultaneously also planning to build a 1,500 mega watt coal thermal power plant.

The CEO of the company said that the company was looking for additional land, which would be used to rehabilitate people near the plant side.

Mishra said the company is looking for additional land to rehabilitate people who might need to be relocated from the plant site.

ArcelorMittal, which signed an agreement with Orissa government for the plant in December 2006, plans to begin construction in 2008 and may complete the first phase by 2012, Mishra said.

McKinsey and company holds the estimated data, which accounts 70 percent of the nation’s total coal reserves and 55 percent of its iron ore are kept by the threes states of Jharkhand, Orissa and Chhattisgarh.

The company would invest $20 billion for two projects in Orissa and Jharkhand and rest $15 billion worldwide as it has planned to invest $35 billion as a whole. A total of 24 million tonnes of steel is hoping to produce in four phases in India.

The company has acquired 7,000 acres of land already in Orissa, besides it is hoping to additional 3,000 acres of land to be sanctioned by the state government. South Korea's Posco is also setting up a 12-million tonne steel unit in the state.

ArcelorMittal in October 2005 announced a $9 billion venture in Jharkhand, near Orissa’s border. The progress on that project has been slow, MD Lakshmi Mittal had said in July 2006.

Regarding Egypt license is concerned, it was auctioned in a competitive bidding process, and ArcelorMittal's winning bid was approximately $60 million.

Under the terms of the license, the plant will produce 1.6 million tons of steel using Direct Rendering Infrastructure (DRI) technology, and 1.4 million tons of billets through the Electric Arc Furnace Route. Construction of the plant is expected to start in 2009 near the Northern Red Sea Coast.

On asking why the company decided to go and set up industry in Egypt, Aditya Mittal said, “The Middle East is a growth market for the steel industry and it makes sense for ArcelorMittal to expand its presence in the region.”