Bangalore : ArcelorMittal, the world's largest steelmaker, and four rivals may spend a combined Rs1 trillion (Dh78,164 billion) to build plants in southern India after investments in other states were stymied.
ArcelorMittal plans to invest Rs300 billion in the state of Karnataka, Chairman Lakshmi Mittal said yesterday at a media conference in Bangalore. JSW Steel Limited, India's third-largest, may invest Rs151.3 billion and Bhushan Steel Limited, Rs279 billion, the local government said in a statement.
Karnataka, whose capital Bangalore is a hub for the global computer-services industry, is seeking investments to exploit its iron-ore resources, competing with states including Orissa and Jharkhand where projects worth more than $80 billion have stalled because of protests by villagers and approval delays.
Hurdle
"The Karnataka government may face fewer problems convincing its people to give up land because of the high literacy level, but land valuation may be a hurdle," said Alex Mathews, research head at Geojit BNP Paribas Financial Services Limited.
Steelmakers worldwide are seeking access to mines to build plants as raw material costs soared with the economic recovery.
India's steel demand last year rose 7.6 per cent, helped by rising sales of cars and infrastructure spending.
Rising consumer incomes helped Maruti Suzuki India Limited, the nation's biggest carmaker, posted its highest-ever monthly sales in May, it said on Tuesday.
Essar Steel Limited, India's fourth-biggest, plans to invest Rs220 billion to build a 6 million metric tonne plant, Chairman Shashi Ruia said at the investor conference. The mill may start in the year ending March 31, 2015, spokesman Manish Kedia said.
NMDC Limited, India's largest iron-ore producer, aims to set up a 5 million tonne plant at a cost of Rs92 billion, Chairman Rana Som said at the same meeting.
