Arcelor Mittal said on Sept. 10 delays in obtaining approvals for its two Indian plants had pushed up costs by 50% but the company was still committed to investing in the country.
Arcelor Mittal said its planned integrated steel plants in mineral-rich Orissa and Jharkhand states were facing big cost overruns due to delays in getting mining, land acquisition and other approvals. "When we started, we estimated they (the two plants) would cost about $20 billion," Arcelor Mittal CEO Lakshmi Mittal said. But "there has been a delay for two years so costs have gone up by 50%," he said.
At the same time, Mittal said Arcelor Mittal was "still very excited about our (eastern) Indian projects" and added he "was emotionally committed to the country."
He said India is "strategically important for our (Arcelor Mittal's) future growth" and added he was scouting for more investments in the country as well as looking at expanding steel capacity in other emerging markets such as Brazil and Mexico.
Neither Arcelor Mittal's experience nor the bitter dispute over the building of a Tata Motors plant in West Bengal slated to produce the world's cheapest car detracted from India's appeal as an investment destination, Mittal said. A slew of Indian business leaders have warned that violent demonstrations demanding return of farmland acquired for the Nano car plant in West Bengal will damage the country's investment allure.
Large industrial projects, which Indian politicians say are vital to creating jobs in the country of over 1.1 billion people, have faced huge local opposition with farmers objecting to loss of their land.
Last month, the Supreme Court cleared Posco's plan for a $12 billion plant in Orissa in a controversial case seen pitting farmers' interests against industrial development.
Despite the global economic downturn, Mittal forecasted steel demand would continue to grow by 3-5% annually over the next 10 years.
Copyright Agence France-Presse, 2008
