The Odisha government has begun talks with ArcelorMittal, asking the company to set up a 3 million tonnes per annum (mtpa) steel plant in the State.
The ₹12,000-crore project was originally meant to be set up by Essar Steel, according to State government officials. Now, with ArcelorMittal taking over Essar Steel under the Insolvency and Bankruptcy Code (IBC), the Odisha government wants the new promoter to honour the commitment and revive the project.
MoU signed in 2005
“This steel plant was envisaged to be set up by Essar Steel under an MoU signed with the Odisha government in 2005,” Hemant Sharma, Principal Secretary, Industry, Government of Odisha, told
Last December, ArcelorMittal had announced that it had completed the acquisition of Essar Steel and simultaneously established a joint venture with Nippon Steel Corporation, called ArcelorMittal Nippon Steel India Ltd, (AM/NS India), which would own and operate the acquired company. ArcelorMittal currently holds 60 per cent of AM/NS India, with Nippon Steel holding the balance.
Pellet complex
Essar Steel had earlier set up a 6 mtpa pellet complex in Paradip. The pellet plant is backed by a 12 mtpa beneficiation plant at Dabuna (Keonjhar) — the two facilities are connected by a slurry pipeline.
The Odisha Industrial Infrastructure Development Corporation had acquired 1,262 acres of land in Paradip, of which 1,123 acres were for private companies and around 100 acres for government-owned ones. The State gave Essar Steel 676.61 acres of land to build a 3 mtpa greenfield steel mill for ₹116.27 crore. “They have the land but the work could not begin there,” Sharma said.
Instead of a steel plant, Essar developed the pellet plant, utilising 200 acres of the allotted land.
“The steel market started behaving oddly because steel prices, from 2012 onwards, went through fluctuations and all the companies went through problems,” an industry watcher said. “By the time the market started recovering the company was under the National Company Law Tribunal (NCLT). This (steel) project was envisaged near the pellet plant.”
“The State government is targeting 50 per cent value addition in minerals by 2030,” Sharma added. “Presently, the value addition in minerals in Odisha is only 23 per cent. This includes steel, stainless steel and alumina. For this, our primary metal-making capacity must increase. Today we have 32 mtpa of steel-making capacity; this should become 100 mtpa. We have 8 mtpa of alumina and 3 mtpa of aluminium, so this should also double.”