New Delhi: He may be the world's largest steel producer but Lakshmi Mittal's dream to have a plant in his homeland (India) continues to be a distant dream, thanks to regulatory hurdles.
"In India, we have got couple of ambitions and they are all ambitions at this time because the progress is slow," Mittal said in a conference call with reporters, while speaking on ArcelorMittal's second quarter results.
Expressing hopes that someday his plans will be realised and his company ArcelorMittal will begin construction of steel plants in the country, he, however, further said, "I do not know how and when."
After its failure to make any headway in setting up two large plants of 12 million tonnes per annum capacity in Jharkhand and Orissa, ArcelorMittal shifted its strategy in the country last year to setting up smaller projects with potential investment of USD 1.5 to USD 3 billion range.
The Jharkhand and Orissa plants were supposed to attract an investment over USD 10 billion each.
However, the Lakshmi Mittal's firm is now banking on its Karnataka project, where it has plans to set up steel mill of 6 MTPA in two phases, alongside a captive 750-MW power plant.
"We continue to march slowly... I hope it will be slow and steady (progress)," Mittal said, adding, "We are making progress in India."
Land acquisition has been sailing smoothly for the Karnataka plant, which entails an investment of Rs 30,000 crore (USD 6.5 billion), an official of the company had said earlier this month.
The official had further said that about half of the required land has been acquired by the Karnataka Industrial Areas Development Board and ArcelorMittal was waiting to get possession.
The company, which follows calender year, Wednesday posted a 10 percent dip in net income (profit) for the second quarter ended June 30, 2011 at USD 1.535 billion against a profit of USD 1.706 billion in the corresponding quarter last year.
During the quarter under review, total sales of the company grew to USD 25.126 billion against USD 20.154 billion in the April-June quarter of last fiscal.
In the preceding quarter, the company had clocked USD 1.069 billion profit over a total sales of USD 22.184 billion.
The company has also increased its 2011 capital expenditure target by 10 percent from USD five billion to USD 5.5 billion "due to recently announced investments," Mittal said.
Talking about the outlook for the steel industry during the second half of this year, the ArcelorMittal Chief said that steel output is expected to be slow due to global macroeconomic situations and it will be driven mainly by China.
He added that iron ore prices, which are hovering around USD 150 per tonne currently, will remain steady in the medium term.
Moreover, ArcelorMittal's plans to have 100 million tonnes of iron ore production capacity by 2015 is on track and now the company has shifted its focus on securing coal for its plants, Mittal said.
Early this month, the company has put in an AUD 4.7 billion bid, jointly with US-based Peabody Energy Corporation, for acquiring Australian firm Macarthur Coal and currently due-diligence of the assets of the targeted firm is going on.
"We already own about 16 percent in this company (Macarthur Coal) and if we succeed, we will have 40 percent stake in this joint venture, while Peabody will own 60 percent," Mittal said, adding that "this is another area, where we have moved in".
He added that the company has targeted to increase its coal production by 15 to 16 percent.
First Published: Wednesday, July 27, 2011, 18:59