Jul 7, 2006, 16:23 GMT
New Delhi - Steel tycoon Lakshmi Mittal on Friday announced an investment of up to 8.7 billion dollars to establish a steelworks in India's eastern Orissa state.
Indian-born Mittal - on his first visit since his company, Mittal Steel Co NV, acquired world number two Arcelor last month - held talks with Orissa Chief Minister Naveen Patnaik in the state capital, Bhubaneshwar.
After the meeting, Mittal said the Orissa plant, which was slated to produce 12 million tons of steel annually, would be built in two phases, each producing 6 million tons per year, and added that he hoped the agreement would be finalized soon.
'The state government had made a presentation of what Orissa can offer,' Mittal said. 'I am really charmed. I want to invest here, we are taking the project seriously,' he told reporters.
A working group consisting of executives and state officials would be constituted to carry out feasibility studies for the project, Mittal said.
Nearly 43 companies, including South Korean Posco, the world's fourth biggest steel producer, have lined up to set up mammoth steel plants in mineral-rich Orissa.
Posco is establishing a 12-billion-dollar steel plant in the state, which is considered the largest investment ever made in India.
Mittal's announcement is in line with Arcelor-Mittal's plans to focus on India and China. Soon after the mega-merger, Mittal said the steel giant would look at the up-and-coming economic powerhouses for future expansion.
'Our focus is on India and China. This is important for us to remain the world's biggest steel company,' Mittal said.
But the firm does not have plans to buy out Indian steel firms currently. 'There are not many takeover candidates in India. We do not see any possibilities at least this year,' Mittal's son, Aditya Mittal said.
India has the world's sixth largest iron-ore reserves. Orissa and neighbouring Jharkhand and Chhattisgarh states hold over half of the country's 24 billion tonnes of iron-ore deposits.
Mittal, who last year announced the same investment in setting up a plant of equal capacity in the Jharkhand state, said he was disappointed in that project because of delays in executing it.
When asked whether his company had dropped the Jharkhand project in favour of the Orissa plant, Mittal declined to comment 'till the studies were completed.'
Mittal Steel in a statement later said 'no final decision has been taken and an official position will be taken in the due course.'
Meanwhile, Jharkhand Chief Minister Arjun Munda was confident that Mittal would go ahead with the project, as he had not spelt out plans to pull out from the state.
'Mittal is a big player who can have more than one plant in India,' Munda was quoted by the PTI news agency as saying.
Mittal, who was in India on a daylong visit, thanked the Indian leadership for supporting his efforts in taking over Arcelor and met the Indian Premier Manmohan Singh and Finance Minister P Chidambaram later in the day.
India had accused European governments of discrimination in opposing Mittal's bid in February. Indian leaders, particularly Commerce Minister Kamal Nath, had urged the European Union and the Luxembourg governments not to scuttle the deal.
The steel baron also met officials of the state-run Oil and Natural Gas Corp (ONGC), with which his company is partnered in overseas oilfield acquisitions.
The joint-venture, ONGC Mittal Energy Ltd (OMEL), has already won two oil fields in Nigeria. The combine will invest over 6 billion dollars in setting up a refinery, power plant and railways lines in the West African country.
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