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Resistance, violence led to aborting $12 bn Odisha proj: ArcelorMittal

Last Updated: Tuesday, July 23, 2013 - 17:22

New Delhi: ArcelorMittal, under attack from authorities for scrapping USD 12 billion Odisha steel project, Tuesday contested charges of being "non-starter" and lacking greenfield experience, saying it had made good progress until faced with "physical resistance and violence on the ground".

"ArcelorMittal made all the efforts it could to set up a greenfield project in Odisha... We were making good progress until we faced physical resistance and violence on the ground," a spokesperson of the world's largest steel maker said.

The remarks follow allegations by an Odisha Minister and a top Steel Ministry official that the company was never really keen on the 12 million tonne (MT) per annum steel plant and lacked greenfield experience, Arcelor last week scrapped the project citing inordinate delays in clearances.

ArcelorMittal said: "The company accomplished certain important milestones such as the completion of a feasibility report, an environmental impact assessment study and other relevant technical reports, as well as holding eight Gram Sabhas (public hearings).

"The Orissa government agency IPICOL (The Industrial Investment Promotion Corporation of Orissa) carried out a review in 2010 and found it satisfactory up to that point of time."

Echoing the views of the Odisha government that the company was never really keen on the project, a top Steel Ministry official, who did not wish to be quoted, said that not having a track record of setting new projects, Arcelor was never serious on setting up the Keonjhar plant.

"They signed in 2006. When they signed (MoU with Odisha government), people had lots of apprehensions... Mittal (ArcelroMittal Chairman and CEO L N Mittal) doesn't have a track record of greenfield plants. He is seen as a person more keen on acquiring... In my opinion they haven't been doing ground work," the official said.

The facts are otherwise, retorted the spokesperson, adding that the Group has world-class expertise on setting up greenfield projects.

"ArcelorMittal is pursuing a large greenfield project in Liberia (Africa) which entails setting up a railway network of 270 km and development of a full scale port. The capacity of the greenfield mine will be 15 MTPA out of which 5 MTPA is already operational, it said.

It added that in India the company continues to pursue its greenfield projects in Jharkhand (12 MTPA) and Karnataka (6 MTPA) and "ArcelorMittal is a company of 250,000 people and we have many experienced professionals who have experience of Greenfield projects,"

Further, it added that "Mittal Energy has also partnered with HPCL to set - up a greenfield refinery in Bhatinda, which was commissioned in a record time of nearly 44 months with an investment of about of USD 4 billion."

The 2006 MoU was due for renewal since December, 2011. In the last seven years the company faced a string of protests by local on issues pertaining to land acquisition. The people, mostly tribals, apprehended large-scale displacement because of the project.

The renewal was also pending for about 18 months.

Finally, ArcelorMittal scrapped the Keonjhar project -- entailing largest foreign direct investment -- citing inordinate delays citing problems in acquiring land and securing iron ore linkages.

The company's move prompted Odisha Steel and Mines Minister Rajni Kant Singh to state that "ArcelorMittal was a non-starter and it was never really interested in building a steel plant in Odisha. It failed to meet major milestones though it had signed a Memorandum of Understanding (MoU) with us in 2006".


First Published: Tuesday, July 23, 2013 - 17:22
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