Mittal says yes to North Karnataka

Steel giant ArcelorMittal on Saturday agreed to invest Rs50,000 crore to set up a six million-tonne mega steel plant in North Karnataka in response to an invitation from chief minister BS Yeddyurappa.

The company was offered eight places in North Karnataka, of which two have been short-listed. The company has asked for 4,000 acres for the project.  

The positive response from ArcelorMittal is a feather in the cap of Yeddyurappa who has not just emerged triumphant from a career-threatening political crisis, but has gained crucial brownie points for providing a much-needed employment generator in the state’s backward region.

The plant is expected to generate employment for at least 20,000 people. The Rs30,000 crore phase-I will also include a 750 MW thermal power plant. The phase-II of the project will cost Rs20,000 crore. The proposal was finalised at a meeting chaired by Yeddyurappa and attended by industries minister Murugesh Nirani, chief secretary SV Ranganath and ArcelorMittal group representatives. “Our team had a constructive and positive meeting,” ArcelorMittal chief LN Mittal, said in a statement later.

Putting behind the bitter developments of political turmoil and cataclysmic floods over the past few months, chief minister BS Yeddyurappa scored a major point on his development mantra on Friday when he successfully got the world’s biggest steel producer ArcelorMittal to invest Rs 50,000 crore in the backward North Karnataka region.

According to the proposal, ArcelorMittal will set up a six-million tonne mega steel plant with a potential to provide employment to 20,000 persons. The Rs30,000 crore Phase I of the project will also include a 750-MW thermal power plant. The Phase II will cost Rs20,000 crore.

The proposal was finalised at a meeting chaired by chief minister BS Yeddyurappa.

Industries minister Murugesh Nirani, chief secretary SV Ranganath and ArcelorMittal group representatives participated in the meeting.

“ArcelorMittal India Ltd, has came forward to establish a steel plant and other businesses in the state,” the chief minister said, adding that the company has been offered a choice of seven to eight sites in North Karnataka. Two of the sites have been shortlisted. The company has asked for 4,000 acres to set up the project.

“Our team had a constructive and positive meeting in response to an invitation from the Karnataka government,” ArcelorMittal chief LN Mittal, said in a statement later.

Terming Karnataka as one of the most progressive states in India and therefore an ideal place to build a world class steel plant, Mittal said that he was keen to participate in the state’s growth potential.

After they decide the location, we will put forward the proposal before the high-level committee for clearance and sign a memorandum of understanding within a month, chief secretary Ranganath added.

“We will immediately conduct a technical feasibility study which will take about three months to complete and the location will be finalised subsequently,” a company official told DNA.

Within a month a memorandum of understanding will be signed, subsequent to which the land will be handed over to the company, the chief secretary added.

“We will give all the incentives and tax exemptions in accordance with our new mineral policy,” he added.

Vijay Kumar Bhatnagar, executive vice-president and CEO, India and China of ArcelorMittal said, “Our steel projects in Jharkhand will continue and the projects in Karnataka are in addition to those. We want 300 million tonnes of iron ore per annum.” However, he refused to reveal any further details about the project.

Addressing the media, large and medium industries minister Nirani said, the proposed steel plant would come up in the proposed steel corridor and would give a fillip to development in Bellary, Raichur and Koppal districts.

In fact, the proposed steel corridor is set for some big ticket investments going ahead, with several other global majors also eyeing it keenly.

According to sources, the world’s fourth largest steel maker Posco too has proposed a greenfield project in the state, while the Jindals, who run the Vijaynagar steel plant, are understood to have expressed their interest in expanding their capacity in Karnataka.

Senior Posco representatives are said to have met state government officials earlier this month to discuss the steel project, apart from expressing an interest in obtaining iron ore mining leases in the state, a source privy to the development said.

While the state government has responded positively to Posco’s proposal for a steel plant, the request for mines has met with some reservation as there are several other applications pending, the source said.

The country’s largest private sector steelmaker, JSW Steel, of the Jindals has proposed jacking up its production capacity in Karnataka. With a capacity of 7.8 metric tonnes in the state, it is looking at the next phase of expansion which will take the total production to 10 metric tonnes at by 2010-'11.