Mittal Mix: Boom for Orissa, blues for Ranchi

NEW DELHI/BHUBANESWAR: Chicago, Luxembourg and now Bhubaneswar? LN Mittal’s global odyssey took him to Orissa on Friday, where he hinted at setting up the first greenfield project of the proposed Arcelor-Mittal putting pressure on the Jharkhand government to pull up its socks. ET had reported on Friday that Mittal might be looking to set up a new plant in ore-rich Orissa.

Later, addressing the media in the capital, Mr Mittal said he was constituting a team to explore the feasibility of setting up a 12-m tonne greenfield steel plant in the state with an investment of Rs 40,000 crore. Earlier in the day, Mr Mittal had a 45-minute closed-door meeting with Orissa chief minister Naveen Patnaik in Bhubaneswar.

So what happens to neigbouring Jharkhand that had entered into an MoU with Mittal Steel in ’05? Said Mr Mittal, “The progress in Jharkhand is not as satisfactory as we would like it to be. There are mining rights and land issues there.

Once our team takes a view, we will decide whether to set up our plant in Orissa or Jharkhand or in both states.” The steel baron was quick to add that it was difficult to say if he was pulling out of Jharkhand at this stage. But, one thing is clear. It’s extremely unlikely that he will press ahead with two full-fledged 12-m tonne plants in both the states.

On being quizzed about a possible bid on Tata Steel, Mr Mittal said he had “read the newspapers”. But on the broad issue of possible takeovers in India, his son and M&A mastermind Aditya Mittal was more specific.

Opining that takeover targets in India were far and few between, he said, “I don’t expect any fireworks this year.” Commenting on partnership possibilities with SAIL, Mr Mittal said he was open to an ONGC-Mittal kind of collaboration with the steel PSU.

“We would like to help SAIL in its global plans,” he said. While Mr Mittal has in the past said he would be interested in SAIL if it was privatised, the government’s decision to abandon the disinvestment programme means that it is one acquisition he might have to forego.

Mr Mittal said the merger with Arcelor would not impact the combined entity’s plans for India. “Both companies were looking at India and China and Arcelor is supportive of our presence in India,” he said.

“We are present in many parts of the world. Now, our focus is on India and China. The two countries are important for us to be the biggest steel company in the world,” he said earlier in the day in Bhubaneswar.

Last year, Mittal Steel had entered into an MoU with the Jharkhand state government to set up a 12m steel plant with an investment of Rs 40,000 crore. Since then, the project has been bogged down over issues of iron ore supplies, mining rights and land. “We are revisiting Jharkhand and monitoring the progress. We are looking at a place with better infrastructure and better facilities,” said Mr Mittal.

The father and son of Steel Inc’s first family had flown down directly from London to Bhubaneswar. “I have come here today as Arcelor-Mittal and we had discussions with the CM on a possible project to set up a steel plant in Orissa. It will be a 12-m tonne integrated steel plant, to be set up in two phases of 6m tonne (mt) each,” said to the cheer of a beaming Mr Patnaik.

Flanked by the CM and top Orissa bureaucrats, Mr Mittal sought to add a dash of divinity into the strict business-like proceedings, “Today is auspicious, the last day of the Jagannath festival in Puri. I hope we will be blessed by the Lord this day,” he smiled as the shutterbugs froze the moment.

It is a win-win situation for both Mr Mittal and Orissa CM Naveen Patnaik. “Orissa is rich in resources, but not yet explored. More and more industries will come to the state. As Arcelor-Mittal, we have a vision for a long term relationship with Orissa.

We are not short term players. We want to move first and sign MoU,” he remarked. Indications are that the Orissa plant could be port-based. But the Mittal team also went through possible sites in the hinterland, particularly in the mineral rich Keonjhar district.