Steel giant ArcelorMital on Sunday said it will cut the investment and size of its proposed Rs 50,000 crore Jharkhand plant to half for now.
However, it maintained that in the "long term" it was commited to double the annual production capacity of the plant, which has been delayed for five years, to 12 million tonnes.
"We are looking to build a 6 Million Tonnes Per Annum project in 2-3 phase development to begin with. We remain committed to the production capacity agreed in the Memorandum of Understanding in the long term," a company spokesperson told PTI.
The NRI billionaire L N Mittal-led company in 2005 had entered into an MoU with the Jharkhand government to set up a steel plant with an annual production capacity of 12 million tonnes at an estimated cost of Rs 50,000 crore.
However, regulatory bottlenecks and protests againstland acquisition for the project stymied the mega venture. The company was also forced to move its plant location to Petarwar region in Bokaro district from earlier proposed site in Gumla and Khunti districts.
Besides, its plans to set up a plant of similar size in Orissa have faced similar difficulties. In the wake of such hurdles in the two states, the company last year entered into a pact with domestic steel firm Uttam Galva to mark its operational presence in India.
Also, the company has entered into a pact with Karnataka to set up a six million tonnes steel plant at an estimated investment of Rs 30,000 crore, the construction for which is expected to begin by next year.
"Land acquisition is underway and progressing well. We hope to acquire land from Karnataka Industrial Areas Development Board (KIADB) in early 2011. Construction will begin soon after the acquisition of land is complete," the spokesperson added.
Outlining the company's new India strategy earlier this week, ArcelorMittal Chairman and CEO L N Mittal told Financial Times, "My plan is now to have two to four sites rather than concentrate everything on large plants."
Going ahead with the strategy, the company is reportedly looking at acquiring small units in India and is said to be in talks with at least a dozen firms.
Acquisitions are central to ArcelorMittal's rise as the world's largest steel maker. Recently, it entered into talks with diversified group Indiabulls for prospecting coal assets in Rajasthan.
Sources said that ArceclorMittal believes in possibility of iron ore reserves in the desert state and may consider setting up an independent steel plant there to tap the northern-Indian steel market.