ArcelorMittal officials contradict each other on Indian projects

Steel giant ArcelorMittal may drop the Rs50,000-crore project in Jharkhand if clearance is delayed inordinately, a company director has said, a view contested by another official who deals with Indian operations

Steel giant ArcelorMittal may drop the Rs50,000-crore project in Jharkhand if clearance to it were delayed inordinately, a company director and Luxembourg minister Jeannot Krecke has said, a view contested by another official who deals with Indian operations.

"If Jharkhand is not feasible, we cannot work on the project. ArcelorMittal may drop it if there are delays in approvals. That will be a pity. The country will lose investment opportunities," Mr Krecke told PTI.

However, ArcelorMittal group management board member Sudhir Maheshwari gave a different version saying, "We have no plans to scrap our Jharkhand project. In terms of how projects will be built, it is expected to come up in phases."

ArcelorMittal chairman and chief executive LN Mittal, who was recently in India, had virtually condemned the Indian system saying that the country was “not prepared” to handle such mega investments.

Mr Krecke also said that the company has already downsized its Rs1 lakh crore projects, in Orissa and Jharkhand each, by half. The two states would now have 6-MTPA steel projects from ArecelorMittal, he added.

"ArcelorMittal has decided to downsize the Orissa and Jharkhand steel plants to 6MTPA each due to delays (in acquiring land, among other reasons)," Mr Krecke said.

Mr Maheshwari also contested this statement, saying there was no decision to downsize the two projects and the company's plans would move ahead in a phased manner.

The company is working to set up two 12-MTPA plants in India, one each in Jharkhand and Orissa since 2005.

Elaborating on the company's decision to downsize the projects, Mr Krecke said, "I know that there are problems because it is in some special tribal area and they know that too. So I think they have narrowed the projects and downsized it to 6MTPA (each)."

The decision to alter investments also follows the Karnataka government clearing ArcelorMittal's Rs30,000-crore project in the state.

Asked if the company has already informed the Indian government of its decision to scale down the projects, Mr Krecke skirted the question saying, "It is a private company and it’s up to the businessman to communicate to the government."

About any plans to take up the matter with the government for expediting projects, Mr Krecke said that the company chief had already met prime minister Manmohan Singh and steel minister Virbhadra Singh and conveyed his concerns in this regard.

"I will also go, giving the message to the government for expediting the projects," said Mr Krecke, who has been appointed shareholders' representative on ArcelorMittal's board from 1 January 2010.

The company requires nearly 11,000 acres of land in Jharkhand and about 8,000 acres in Orissa, where it is facing resentment from the locals. The steel maker has been allotted Karampada iron ore with estimated reserves of 65MT mines in Jharkhand to feed the proposed plant. The steel major still awaits iron ore mining leases in Orissa.

  • Like this story? Get our top stories by email.


    "There is a difference between passion and obsession. You can have different degrees of passion but obsession is just one. I was obsessed" — Geet Sethi

    There’s plenty to learn from Geet Sethi—a hugely talented, persevering, sensitive, successful and thoughtful person.

    A lot has changed in India over the past three decades. Shortages of everything have disappeared and jobs are aplenty for those with minimum qualifications. Not only is India closely linked to the world, but is also leading the shift of economic gravity from the West to...

    Premium Content
    Monthly Digital Access


    Already A Subscriber?
    Yearly Digital Access


    Moneylife Magazine Subscriber or MAS member?

    Yearly Subscriber Login

    Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
  • Oil ministry seeks Rs30,000 crore bonds for fuel retailers

    Though the government had earlier this fiscal decided to compensate state-run oil marketing companies by way of oil bonds, the finance ministry has not issued any bonds during the first three quarters.

    Petroleum minister Murli Deora is seeking bonds worth Rs30,000 crore for state-run fuel retailers to make up for the losses they incurred on selling domestic LPG and kerosene this fiscal, reports PTI.

    "He (Deora) will meet the finance minister (Pranab Mukherjee) this evening on the issue," petroleum secretary RS Pandey told reporters in New Delhi.

    Though the government had earlier this fiscal explicitly decided to compensate Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) for the losses they incur on selling domestic liquefied petroleum gas (LPG) and kerosene through the public distribution system (PDS) by way of oil bonds, the finance ministry has not issued any bonds during the first three quarters (April-December 2009).

    The three state-run companies lost Rs11,853 crore in revenues due to not being allowed to raise LPG and kerosene prices in line with the cost during April-September. An additional Rs9,019 crore revenue loss was incurred in the third quarter ending 31st December. Mr Deora had last month met prime minister Manmohan Singh on the issue and it may figure again during a review meeting that the PM will hold tomorrow evening.

    "We are hopeful that compensation will be issued... Whether it is in the form of oil bonds or cash, it has to be decided," Mr Pandey said.

    For the first nine months, oil bonds worth Rs29,872 crore have been sought, he said, adding that for the full fiscal, about Rs30,000 crore is likely to be the revenue loss on sales of LPG and kerosene.

    Mr Deora had, on at least two occasions, written to Mr Mukherjee; and on 21st December, he met the PM to request for issuance of oil bonds. However, the finance ministry did not provide for the funds in the supplementary demands of grant (extra spending) that was approved by Parliament last month. "We have not got any bonds this fiscal," Mr Pandey said.

    In the absence of bonds, BPCL and HPCL reported net losses in Q2 while IOC barely made a profit. Mr Pandey said the government had decided to make good all of the revenue lost on sale of LPG and kerosene through issue of oil bonds, while the revenue loss on petrol and diesel sales was to be met by upstream firms like Oil and Natural Gas Corp (ONGC).

    The three companies currently lose Rs3.06 per litre on petrol, Rs1.56 per litre on diesel, Rs17.23 per litre on kerosene and Rs299.01 per LPG cylinder, he said. They are projected to lose about Rs44,300 crore in revenues for the current fiscal.

    Officials said under-recoveries or revenue loss on petrol and diesel amounting to Rs4,003 crore had been compensated by ONGC, Oil India and GAIL India through price discounts on crude oil and products sold to retailers.

    The government had issued oil bonds worth Rs71,292 crore in the previous fiscal (2008-09).

    HPCL reported a net loss of Rs136.7 crore in the second quarter, while BPCL posted a net loss of Rs158.8 crore. IOC was slightly better off, registering a net profit of Rs284.4 crore.

  • Like this story? Get our top stories by email.


    We are listening!

    Solve the equation and enter in the Captcha field.

    To continue

    Sign Up or Sign In


    To continue

    Sign Up or Sign In



    online financial advisory
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)
    FREE: Your Complete Family Record Book
    Keep all the Personal and Financial Details of You & Your Family. In One Place So That`s Its Easy for Anyone to Find Anytime
    We promise not to share your email id with anyone