Mittal Signs Up to $9bn Steel Plant Complex in India
By Richard Orange and Tracey Boles
STEEL entrepreneur Lakshmi Mittal has signed a $9bn ($5.2bn, E7.5bn) deal to build a vast steel-making complex in eastern India, the first steel venture he has undertaken in his birthplace.
The deal with the state of Jharkhand involves at least five linked projects. As well as a huge steel plant, Mittal will build iron ore mines, coal mines, a 2,500 mega-watt power plant, a water source, and construct townships for the workers. Construction will start within two years and then take four more years until first production.
Mittal said: Steel consumption in India is set to experience considerable growth over the next decade and is therefore a natural market for Mittal Steel.
The British-based entrepreneur originally expected to sign the deal in August, but discussions were bogged down in disputes over whether Mittal Steel would be allowed to export the ore. Under the present deal, Mittal has committed to keeping the steel and ore for the domestic Indian market.
After the memorandum of understanding signed on Saturday, Mittal Steel will carry out a detailed analysis of the project, looking at what infrastructure is needed to support the project.
The deal is the second huge investment made in Indias emerging steel sector. In June, Korean steel giant Posco signed an agreement with the state of Orissa to build a $12bn plant the largest foreign direct investment in India to date.
Mittal Steel and its chief rival Arcelor last week lost out in the privatisation of Turkeys largest steel plant Erdemir. Mittal was the first group to drop out of the bidding for the plant, which went to Turkish investment group Oyak.
Mittal Steel is the worlds largest steel company and Lakshmi Mittals stake propelled him this year to third position in Forbes Magazines global rich list, with his fortune valued at $25bn.
He donated Pounds 2m to the Labour party ahead of the general election earlier this year. In 2002, a similar Pounds 125m donation sparked off the steelgate controversy, after newspapers linked it to government support given to Mittals bid for a Romanian firm.