Bangalore, Jun 4: ArcelorMittal formally signed a Memorandum of Understanding (MoU) to spend Rs 300 billion ($6.4 billion) to build a six million-tonne-a-year steel plant in Karnataka, on Friday, Jun 4.
This deal was previously announced in Jan, 2010 by ArcelorMittal, the world's largest steel maker. It was signed on Thursday, Jun 3 at the Global Investors Meet organised by the Karnataka government.
"Once we have seen progress in Karnataka ahead of other (states), we will start here first and then wait and see what is happening in other states," ArcelorMittal chairman Lakshmi Mittal said.
Mittal said that the nation needs more steel that they need to participate in this growth. Steel sales have been rising at near double-digit rates in India, due to the demands from the infrastructure and automotive segments, pushing prices higher.
Karnataka has iron ore reserves of 3.4 billion tonnes, being the second largest in India. Karnataka's iron ore targets 25 million tonnes of steel production by 2010, which will be almost around three times more of the current production.
ArcelorMittal and Posco, of South Korea have faced the delays of more than two years to build a total of 37 million tones capacity in eastern India because of the long time in allocation of mining leases and local farmer's protests against land acquisitions.
About 400 investors including Wipro and Infosys have signed memorandums of understanding with the state government for a combined investment of Rs3.5 trillion.