ArcelorMittal India acquires land for steel plant in Karnataka

Karnataka is the last state with which ArcelorMittal, the world's biggest steel company, signed a memorandum of understanding for setting up a steel plant and it looks like the company's first steel plant will come up in the state. Vijay Bhatnagar, head of ArcelorMittal's India business, told NDTV: “We got the legal possession of about 2,600 acres in Karnataka for our steel plant.” Steel tycoon L N Mittal, chairman of ArcelorMittal, had also signed memoranda of understanding with Jharkhand and Odisha, before Karnataka, for setting up steel mills. However, it had to downsize its plans for the two eastern states because of various problems. As far as Karnataka is concerned, Mr Bhatnagar told NDTV, the land acquisition is only the first step and a lot of work has yet to be done. Asked about when the construction of the plant will start, Mr Bhatnagar said, “We really don’t know as we will now start applying for statutory approvals, such as environment clearances, from the local government." On the supply of iron ore (the main raw material in steel-making), Mr Bhatnagar told NDTV that the issue will be discussed with the Karnataka government. The development follows concerns and questions about ArcelorMittal's ability to finance new projects. Only recently, Moody's cut its debt rating for ArcelorMittal to ‘junk’ with a negative outlook. The company reported a third quarter net loss of $709 million. ArcelorMittal’s plans for its proposed plants in Jharkhand and Odisha are still not clear. However, Mr Bhatnagar said he is confident of progress in Jharkhand as talks with the state government in the recent past have been positive. With continued delays in the country, Mr Mittal had in the past shown his displeasure and also said India is not ready to handle big investments like the ones he has announced. Apart from ArcelorMittal's three 6 million tonne steel plants each in Jharkhand, Odhisa and Karnataka, Mr Mittal's private investment firm jointly operates a 9 million tonne crude oil refinery in Bhatinda, Punjab. ArcelorMittal has proposed to set up a 6 million tonne steel plant along with the 750 MW captive power plant in Karnataka.