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Mittal to sign MOU with Orissa Govt
By siliconindia
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Tuesday, 12 September 2006, 19:30 IST
New Delhi: The worldÂ’s largest steel maker, Mittal Steel Co., is likely to sign a Memorandum Of Understanding (MoU) with the Orissa government to build a $8.7 billion steel plant in the country. To be finalized by November, an initial investment of $7 billion (nearly Rs 32,200 crores) would be made to set up the 12 million-tonne steel plant.
Announcing the developments, Orissa's Minister for Steel and Mines Padmanabha Behara said that the MoU would be signed after the company buys 3,000 acres of land that it has already sought from the state government.
Just out of news after the Arcelor deal, Mittal had announced his intentions of setting up a steel plant for Orissa and Jharkand last year. The project will compete with Posco, the world's fourth-biggest steel maker, which announced similar intentions.
Expecting the steel demand in India and China to rise three times faster than in Europe and North America over 10 years, a total of $21 billion is the investment planned by Mittal Steel and Posco in the next seven years in India to tap rising demand and the world's fifth-largest iron-ore reserves.
To be built in two stages of 6 million tons each, the site most likely to be used for the project is the upcoming port in Gopalpur being built by the Orissa government. India's steel demand is likely to grow an average 7.3 percent a year over the 10-year period and China's to expand 6.9 percent while Europe's steel demand will only average 1.9 percent a year, North America's 1.8 percent a year and Japan at 1 percent a year, Mittal said in March.
According to a McKinsey report, Jharkhand, Orissa and Chattisgarh in India account for 70 percent of the nation's coal reserves and 55 percent of its iron ore.