Fate of $6 Billion Indian Steel Plant in Jeopardy

Nov. 29, 2010
Jindal Steel and Power's proposed steel plant in Angul town is the fourth major project to face problems in the mineral-rich state of Orissa.

After the government raised questions about environmental clearance given for the project, the future of a proposed $6 billion steel plant in eastern India was in doubt.

Jindal Steel and Power's proposed steel plant in Angul town is the fourth major project to face problems in the mineral-rich state of Orissa.

The environment ministry asked the company on Nov. 26 to explain why clearance for the project should not be revoked, accusing Jindal Steel of violating the terms of environmental approval granted in 2007.

If Jindal Steel's clearance is revoked, it would be a major setback for the ambitious expansion plans of India's fourth-largest domestic steel producer.

Jindal Steel was not supposed to build anything on forest land that is part of the project area. But the Orissa state government has reported construction activity, such as building of roads and storage facilities, is taking place in the forest area, the ministry said.

Sushil Maroo, Jindal Steel's CFO, said the company has not received any environment ministry notice yet. "We haven't violated any environmental laws. Our project has both environmental and forest clearance," Maroo said. But he added some "minor infrastructure work" may have taken place on the forest land.

Britain's Vedanta Resources' proposal to mine Orissa's remote Niyamgiri Hills for bauxite was recently rejected by the environment ministry, fearing it would damage the ecology and affect local tribes.

Mega steel projects by ArcelorMittal, POSCO and Tata Steel have also been unable to get off the ground for the last five years as environmental laws, tribal rights and protests by landowners have made it tough to acquire land.

Jindal Steel and peers such as Tata Steel and JSW Steel are trying to get massive steel projects started as soon as possible to take advantage of domestic demand, which is expected to grow more than 10 percent annually over the next decade to feed a fast-growing economy.

In the past, when India's environment ministry was seen as little more than a "rubber stamp", some companies embarked on unauthorized construction but Environment Minister Jairam Ramesh has shown a keenness to police the rules.

Copyright Agence France-Presse, 2010

Popular Sponsored Recommendations

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Five Ways Aerospace and Defense MRO Can Prepare for the New Normal!

Dec. 6, 2023
The right tools can help A&D suppliers track the essentials & ultimately, boost their margins. Advanced analytics can also help determine the profitability of contracts, drive...

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!