Mittal may exit Orissa, J'khand projects over delays

ArcelorMittal, the world's largest steel maker, has threatened to abandon its $20 billion steel projects in two Indian states over delays, but one of the states said that progress was indeed plagued by gaps in communication.

"If we cannot make progress in these two sites we will have to abandon the idea of starting the projects there and look for other places in India for our expansion," ArcelorMittal Chairman and CEO Lakshmi Mittal told British daily Financial Times.

Shortly after the merger of Mittal Steel with Arcelor in 2006, Mittal had announced plans for a 12-mtpa steel plant in Orissa and thereafter an identical project in Jharkhand. But work on acquiring land for the projects hit a wall of opposition from locals.

"The government can facilitate a dialogue... but the steel company has to purchase land from the villagers by winning their confidence... It seems there is a big communication gap between ArcelorMittal and the villagers," Jharkhand's Industry Director Aradhana Patnaik said.

The newspaper quoted Mittal as saying that the delays in persuading farmers and others to sell the land required for building the plants were unacceptable to the company.

Though the preparatory work has been under way for two years, the financial effect of abandoning the plants would be "negligible" since no land had so far been acquired and no building work has been done, Mittal added.