Cornered, Jharkhand gives letter of comfort

JAMSHEDPUR: Shocked out his months’ long stupor by the news of Lakshmi Mittal’s announcement of a 12m tonne greenfield steel project in Orissa, Jharkhand’s mines and geology secretary S K Satapathy said on Friday that Mittal’s proposed Jharkhand steel project is on track and in “advanced stage of implementation”.

The hapless mines secretary has reasons to feel cornered. Mittal Steel has been long asking the Jharkhand government for a letter of comfort regarding mining rights in the state, which wasn’t quite forthcoming.

Now that the world’s largest steel maker has announced the project in Orissa, the Jharkhand mines secretary said: “A letter of comfort has also been provided to the Mittals as per their request. We’ve assured them of the availability of raw materials like iron ore and coal.”

Even on the day that Mr Mittal stepped into Arcelor, the letter wasn’t quite ready perhaps. Now, suddenly, one hears it has been sent. Even if it’s not too late in the day for that, ET asked Mittal Steel’s Jharkhand representative Sanak Mishra about whether the Jharkhand project is on anymore.

True to the best corporate style, he made no comment. He, however, had a cryptic one-liner to add: “Nobody can answer this question nor can jump into any conclusion at this point of time.”

Chief Minister Arjun Munda was in New Delhi when ET caught up with him. The wily Munda played an entirely different line altogether. He actually welcomed Mittal’s decision to set up a virgin 12m tonne plant in Orissa !

“Steel consumption in India is on a rise. Steel production today is about 35m tonne. In order to reach a production target of 110m tonne, we need more steel producers like Mittal.

So why only Jharkhand and Orissa? Mittal should also set up more such plants in other iron-ore rich states. If Mittal can acquire a company such as Arcelor, he shouldn’t have any problem setting up two 12m tonne plants,” he said.

Mr Satapathy’s statement about the Mittal Jharkhand project being in advanced stage of implementation, evoked a surprised reaction from many since there isn’t a sign yet anywhere in the state to support the claim. However, the mines secretary was not to be daunted.

“We are regularly holding meetings with Mittal Steel and the next meeting is slated on July 15. The company will then finalise one site for the plant out of the six sites selected by them in Jharkhand,” he said.

The mines secretary of course found no reason to panic because of Mittal’s announcement on Friday. “The Orissa project will not affect Jharkhand,” he said trying desperately to make up for the absence of Arjun Munda, chief minister cum industry minister of the state, who is now away in Mumbai and unavailable for comments.

Other state government sources said the first choice of the Mittals was the litigation-locked Chiriya mines. However, alternatively the state government is supposed to have “provided the Mittals with a list of iron ore mines that are available”.

The mines secretary further said that as per rules, a detailed project report (DPR) is to be submitted within 18 months of signing of the memorandum of understanding (MoU).

In case of the Mittal project, only nine months have elapsed since the MoU was signed on October 8, 2005. “Nobody can dare say that Mittal Steel’s Jharkhand project is moving slow” the mines secretary said.

Some other quarters in the Jharkhand government chose to describe the Mittal Orissa project announcement as a “political stunt”. “He knows better than many that Jharkhand is much richer in iron ore than Orissa, whose reserves are depleting fast.

If Orissa cannot provide Posco with good mines, how will they manage Mittal who is the world’s largest steel maker now?” a official wondered.