World's biggest steel producer Arcelor Mittal on Thursday signed a memorandum of understanding with the Karnataka Government to establish a 6-million tonne integrated steel plant in Bellary district.

Speaking to media persons here on the sidelines of the two-day Global Investors Meet, organised by the State Government, company Chairman and CEO Lakshmi N. Mittal said, “we hope to have for fast progress in Karnataka.”

Mr. Mittal said the company expected to make an investment of Rs.30,000 crore in the project.

However, he said, the amount might change after the detailed project report was finalised. He said the project would be ready in 36 months after acquiring land and commencing engineering work on the site. “As of now, we do not know how long the race is going to be and how many hurdles there will be on the way,” Mr. Mittal remarked. Coal linkages, mining leases, water allocation and other raw material supplies had still to be worked out for the project. The company had already paid Rs.268 crore to the government for acquiring 4,000 acres in Bellary district, he pointed out.

Orissa experience

Mr. Mittal said the company had received ‘encouraging signs' from the State Government after it started considering the project, which also included a 750-MW power plant that would be implemented through a joint venture.

Referring to the company's experience in Orissa and Jharkhand, Mr. Mittal said, “There were lots of issues in these two States, particularly relating to environmental clearances and protests by local bodies.” ArcelorMittal was ‘still working' with the Jharkhand Government for ‘land sites' for the project, he said.

Asked if the company was accepting some ‘trade-offs' in opting for a steel plant in Karnataka, Mr. Mittal said: “There is no trade-off. Our position depends on market conditions. If we see progress in Karnataka, we will be here.”

Mr. Mittal refused to comment on the outlook for the global steel industry but when asked about the renegotiation of long-term contracts, he said his company would “adjust production, depending on demand conditions.” “This may include idle capacity,” he remarked.

Asked if he would be deterred by the many other proposals for steel plants in the State, which would require scarce raw materials, Mr. Mittal said, “I am confident we will get the approvals. There have been many MoUs that have been signed but all of them will not translate into reality.” He also ruled out any plan to establish a greenfield power plant in Karnataka.