Arcelor Mittal signs MoU with Orissa Govt

Updated on Dec 21, 2006 07:17 PM IST

The world's biggest steelmaker signs an MoU for a 12 mn tonne steel plant in the state, reports Soumyajit Pattnaik.

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None | ByPress Trust of India, Bhubaneswar

Orissa's industrialisation drive got another shot in the arm on Thursday with the conclusion of a "Memorandum of Understanding (MoU) between the state government and Mittal Steel Company NV (Arcelor-Mittal)" for setting up a 12-mn tonne per annum (MTPA) steel plant in Keonjhar district with an estimated project cost of Rs 40,000 crores.

As per the MoU, this Mittal project too will seek special economic zone (SEZ) status like the Posco steel plant. Chief minister Naveen Patnaik, who was present on the occasion described the MoU as a "red letter day" for Keonjhar and the entire state. This is second mega foreign direct investment in the state after the Posco steel project.

According to the MoU, the 12-MTPA plant would come up in two phases. After the detailed project report (DPR) is prepared, a 6-MTPA steel plant would be completed within 48 months.

The balance 6-MTPA capacity would be added in 54 months after completion of the first phase. The plant facility would consist of coke oven, steel making, rolling mills and captive power plant.

As per the MoU, the land requirement for the plant will be 8000 acres out of which 6,000 would be required for the plant, 1,000 acres would be required for the captive power plant and another 1,000 acres for township.

Mittal Steel has proposed to set up its own captive power plant of 750 MW. They will need approximately 50MW of power during construction. 

There will be some similarities with the Posco MoU, which was inked in September 2005. Like Posco, Mittal Steel too would be recommended for 600 million tonnes of iron ore mining lease for the first thirty years after fulfilling certain targets as mentioned in the MoU.

But there will not be any iron ore export or swapping option for Mittal Steel as stipulated in the Posco MoU. Like the Posco project, a senior IAS officer will be appointed as the nodal officer for the Mittal project.

The project will create employment potential for 20,000 people both directly and indirectly. The plant will require 125 million cubic metre of water per year and water requirement is proposed to be met from Baitarani river and Kanpur dam.

Chief minister Naveen Patnaik expressed hopes that the company would commence work very soon and complete it on schedule. Patnaik also requested the company to pay special attention to address environment and rehabilitation  issues.

The MoU was signed by steel secretary of the Orissa government LN Gupta and Malay Mukherjee, member, group management board of Arcelor-Mittal. 

The process for conclusion of the MoU was galvanised after Mittal Steel submitted the required combined application form to Industrial Promotion and Investment Corporation of India Ltd (IPICOL).

Mittal Steel had appointed MECON as a consultant to recommend the best site for the plant. The four sites for the plant shortlisted were—Khallikote in Ganjam district, Basudevpur in Bhadrak, Balgopalpur in Balasore and Patna in Keonjhar district.

The location in Keonjhar district will be be closer to the raw-material source and will pose minimum displacement problems. Mittal Steel had earlier inked a MoU with the Jharkhand government for setting up a steel plant in Bhubaneswar.

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