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Rediff.com  » Business » Arcelor, Posco spends in Orissa negligible

Arcelor, Posco spends in Orissa negligible

April 27, 2011 14:24 IST
Two of the world's leading steel-makers, ArcelorMittal and Posco, had proposed to invest Rs 91,000 crore (Rs 910 billion) for setting up mega steel units in Orissa, but their actual investment was negligible even about half a decade after signing MoUs with the state government.

While ArcelorMittal had proposed to invest Rs 40,000 crore (Rs 400 billion) on its proposed 12-mtpa greenfield steel mill in Keonjhar district, Posco planned to invest Rs 51,000 crore (Rs 510 billion) for an equal capacity steel plant near Paradip.

While Rs 56,090.34 crore (Rs 560.90 billion) was invested in the steel sector of the state by March, 2011, ArcelorMittal invested nothing, said Orissa Steel and Mines Minister Raghunath Mohanty, adding that Posco claimed to have spent Rs 329.15 crore (Rs 3.29 billion).

Of the total investment proposal of Rs 2,13,969.40 crore (Rs 2.13 trillion) in the steel sector, the share of the two companies was around 42 per cent (Rs 91,000 crore). Meanwhile, Posco's MoU tenure of five years ended on June 21, 2010, while ArcelorMittal's term would expire on December 20, 2011, he said.

While Posco made some progress, ArcelorMittal was yet to submit a detailed project report (DPR) to the state government, an official in the steel department said, adding that Bhusan Steels Limited had invested the highest amount of Rs 12,000 crore (Rs 120 billion) in the state, followed by JSPL's Rs 11,283.24 crore (Rs 112. 83 billion) investment.

Bhusan Steels Limited achieved steel production of three mtpa by the end of March, 2011, the minister said. Besides ArcelorMittal, the companies yet to make investment so far are: SSL Energy Limited (proposed investment of Rs 8,609 crore), Amtek Metal & Mining Limited (proposed investment of Rs 15,820 crore) and Deo Mines & Minerals (P) Ltd (proposed investment of Rs 316 crore).

Employment generation by the two steel majors was also poor, the official statistics released by Mohanty said. While ArcelorMittal had given employment to 11 persons (10 from the state and one from outside), the Posco project gave employment to 42 people -- 35 from Orissa and 7 from outside.

Three out of 50 MoU signing steel companies have not given any employment in the state or outside, the minister said.

They were: Deo Mines & Minerals (P) Ltd, Amtek Metal & Mining Ltd and Atha Mines (P) Ltd. On the progress of the two leading companies, the minister said the state government had recommended Posco-India's name for a prospecting licence (PL) over 2,500 hectare of iron ore deposits at Khandadhar in Sundargarh district, but the company was unable to start PL as the matter became sub-judice.

The South Korean steel major had meanwhile obtained conditional environmental clearance from the Ministry of Environment and Forests (MoEF) while awaiting forest diversion clearance from the Centre, the minister said. Neither Posco nor ArcelorMittal had acquired the required land for their respective projects.

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