| UPDATE: Mittal may exit Orissa, J'khand plans over delays |
| Press Trust of India / London/ Ranchi October 5, 2009, 14:59 IST |
ArcelorMittal, the world's largest steel maker, has threatened to abandon its $20 billion steel projects in two Indian states over delays, but one of the states said that progress was indeed plagued by gaps in communication.
Shortly after the merger of Mittal Steel with Arcelor in 2006, Mittal had announced plans for a 12-mtpa steel plant in Orissa and thereafter an identical project in Jharkhand. But work on acquiring land for the projects hit a wall of opposition from locals."If we cannot make progress in these two sites we will have to abandon the idea of starting the projects there and look for other places in India for our expansion," ArcelorMittal Chairman and CEO Lakshmi Mittal told British dailyFinancial Times.
"The government can facilitate a dialogue... But the steel company has to purchase land from the villagers by winning their confidence... It seems there is a big communication gap between ArcelorMittal and the villagers" Jharkhand's Industry Director Aradhana Patnaik said.
The newspaper quoted Mittal as saying that the delays in persuading farmers and others to sell the land required for building the plants were "unacceptable" to the company.
Though the preparatory work has been under way for two years, the financial effect of abandoning the plants would be "negligible" since no land had so far been acquired and no building work has been done, Mittal added.
"The company has to come forward and convince the villagers that the plant will bring jobs, hospitals, educational institutes, roads and development of their villages," Patnaik said.
She cited the examples of Tata Steel, Electro Steel, Jindal Steel and Power Limited, which have acquired private land at their own initiative.
ArcelorMittal had planned to invest Rs 42,000 crore for a 12-mtpa greenfield steel plant and had identified land in the villages of Khunti and Gumla in mineral-rich Jharkhand.
Authorities in Jharkhand have reportedly identified 1,015 acre government land in Gumla for the steel major.
On Saturday, a group headed by Adivasi-Moolvasi Raksha Manch Convenor Dayamani Barla, had submitted a memorandum to the director stating that they would not 'budge an inch from their ancestral land'.
The Manch had claimed that the land falling under Kamdara (Gumla), Torpa (Khunti) blocks was covered under the Chhotnagapur Tenancy Act which protects tribal land from sale.
"Lakshmi Mittal is close to pulling out of a $20 billion plan to build two large steel plants in India the centrepiece of efforts by one of the world's most prominent industrialists to expand in the country of his birth," the Financial Times said.
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