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Lakshmi Mittal has mega plans for India
| Plans greenfiled projects either in Orissa or in Jharkhand; ONGC-Mittal to invest $5 b in Nigeria |
LURE OF ORISSA: Steel baron L. N. Mittal (left), with the Orissa Chief Minister, Naveen Patnaik, in Bhubaneswar on Friday.
NEW DELHI: Steel magnate Lakshmi N. Mittal plans to make an investment of Rs. 40,000 crore in India over the next few years primarily in greenfield steel plants, either in Orissa or in Jharkhand.
Mr. Mittal said here on Friday that a working group had been set up to examine the feasibility of setting up either a single 12-million-tonne steel plant in one of the two States or a project in both States.
Mr. Mittal, who arrived in the country fresh from the successful takeover of Arcelor Steel and making it the world's largest steel company, told the media that acquisitions in India could not be ruled out.
His son and Mittal Steel's Chief Financial Officer Aditya Mittal, however, said the takeover candidates were "few and limited'' so he did not expect to see any "fireworks'' on this front.
Addressing a crowded press conference, the steel tycoon who was on a whirlwind one-day visit to India, indicated his concern over the slow progress in Jharkhand in respect of the proposed six-million-tonne steel project.
He said "there is not as much progress as expected'' and referred to the fact that land and mining issues had not yet been resolved.
He did not, however, rule out the project in Jharkhand, saying "we would like to evaluate the options for Jharkhand and Orissa.''
The working group, he said, would consider the possibility of either a single 12-million-tonne steel project to be set up in two phases of six million tonnes each as well as the prospect of two smaller plants in both States. "Our goalposts keep changing. Wherever we are faster, we will go,'' he said in response to a question about whether the Jharkhand project had been dropped. Mr. Mittal, who visited Orissa in the morning, met Prime Minister Manmohan Singh and Finance Minister P. Chidambaram later in the day.
Replying to questions, Mr. Mittal said he would be thanking the Prime Minister for the Government's "indirect support'' for the Mittal-Arcelor merger. He said the Government's support was given in the larger context of Indian businessmen seeking global alliances and the fact that failure of the takeover could be a "setback to their aspirations.''
He also thanked each and every Indian for their support in the endeavour to acquire Arcelor, which would take his company ahead of its competitors by at least five to seven years. He said the merged company had a turnover of about Rs. 370,000 crore annually and annual production of 120 to 130 million tonnes of steel along with a variety of products, interests in mining and a strong research and development infrastructure.
On whether Mittal Steel would partner with the Steel Authority of India Limited (SAIL) on the lines of his association with the ONGC, he said it would be considered if there was any opportunity in this regard.
Mr. Mittal was puzzled, however, over why Tata Steel should feel vulnerable as a result of his takeover of Arcelor.
Asked whether he would like to donate to charity like Warren Buffett has done recently, he said "I am still very young. I will work for a couple of more years and then think about it,'' he said.
ONGC-Mittal investments
As for the progress of the joint ventures with the ONGC aimed at finding equity oil abroad, he said work had begun in 21 countries with the first agreement having been signed in Nigeria.
Mittal Steel and the Oil and Natural Gas Corporation (ONGC) have plans for investing up to $5 billion in Nigeria in case oil is found in the exploration block for which an agreement has just been signed.
ONGC Mittal Energy Limited (OMEL), the joint venture set up last year by Mittal Steel and ONGC Videsh Limited, is expected to focus on five countries in Central Asia and Africa for acquiring oil and gas assets.
These issues were discussed here on Friday by top ONGC officials with Mr. Mittal.
May invest in Rosneft
According to ONGC Chairman and Managing Director R. S. Sharma, the proposed investment in infrastructure in Nigeria is linked to OMEL's success in finding oil and gas in the exploration block, which has been awarded to it in May. The memorandum of understanding is "calibrated to the hydrocarbon potential of the exploration blocks.''
Petroleum Secretary M. S. Srinivasan said the ONGC was examining investing $3 billion to take up to five per cent equity in the Russian state oil company, Rosneft, which is making an initial public offering (IPO).
He told reporters here on Friday that discussions were under way by ONGC Videsh Limited (OVL), the overseas subsidiary of the ONGC.
MoU for Orissa project to be signed soon
The IPO, which expects to raise about $11 billion with listings in London and Moscow next week, values Rosneft at about $80 billion.A five per cent equity 0stake would, thus, mean an investment of $3-4 billion.
Prafulla Das writes from Bhubaneswar:
Mr. Mittal on Friday announced that his company would set up a 12-million-tonne capacity steel plant in Orissa.
The proposed steel mill would be built in two phases of six million tonnes each, Mr. Mittal said at a press conference at the State Secretariat here.
The steel mogul said a formal memorandum of understanding for the setting up of the greenfield steel project would be signed soon. Orissa Chief Minister Naveen Patnaik, Mr. Mittal's son and Chief Financial Officer of Arcelor-Mittal, Aditya Mittal, were present.
Mr. Mittal and his team had a long discussion with Mr. Patnaik, Industry Minister Biswabhushan Harichandan, Steel and Mines Minister Padmanabha Behera and Chief Secretary Subas Pani.
The Arcelor-Mittal team included the company's Chief Operating Officer Malay Mukherjee from the London office and Sanak Mishra and Rajendra Agarwal from their India office.
Welcoming Mr. Mittal's investment proposal, the Chief Minister assured the company full support for setting up the steel project.
Mr. Patnaik indicated that a team of officials will assist Arcelor-Mittal to work on various details for the proposed project.
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