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PTI
NEW DELHI, Sept 26: Australian mining giant Broken Hill Proprietary Company (BHP) has put off plans to set up a $ 300-million steel project in the country owing to the Asian downturn, a senior company official said on Friday.
BHP, which received Foreign Investment Promotion Board (FIPB) approval only last week for bringing in Rs 1,050 crore to invest in downstream ventures, has decided to keep its plans to set up plants in Chennai and Daruhera near Delhi for refined steel in abeyance, general manager (international) India region George Stupple said.
The Australian steel major had obtained FIPB and other clearances for the project two-and-a-half years back and had even acquired land for the plant.Stupple, however, said BHP "would very much like to see the project go ahead as we see very good prospects for refined-steel products in normal times."The two plants were to manufacture construction materials like corrugated coloured sheets from semi-finished steel.
Stupple said only a very small proportion ofthe $300 million was so far invested in the project, which is wholly-owned by BHP.
He felt that the big question was when will the economy pick up. Despite the setback, he said India was becoming a focal country within BHP and the company was planning to make forays into many sectors including mining and LNG terminals. "In that focus, all divisions of BHP are very keen to develop plans for investment. The only question is when," the BHP country manager said.
Last week, the company received FIPB nod for setting up a holding company for investing in downstream ventures in LNG and oil. Earlier this month, the Australian company also got the clearance for a $1.4-billion liquefied natural gas (LNG) storage infrastructure and terminal facility in Kakinada in Andhra Pradesh along with Belgian company Tractabel. Stupple said the consortium, where Tractabel and BHP would hold 35 per cent stake each, was talking to various local companies to pick up the balance stake.
Giving details of the companies with whom theconsortium was in talks, Stupple said the Indian partner will be selected within a month's time. Stupple said, initially, the consortium would set up only a condensate fuel storage facility and then move onto LNG as it involves about $1.5 billion compared to a couple of hundred millions for condensate fuel. "LNG is purchased on a one-time contract and India is not accustomed to this kind of business. Long-term "take or pay" contracts is fairly new to the country. That needs to be understood before we invest," he said.
On petroleum exploration, Stupple said India was not in the immediate scheme of things as BHP would prefer to wait and see what happens to petroleum-sector reforms.
The Australian company had in the past carried out some unsuccessful exploration in Tapti River basin. On diamond mining, Stupple said BHP will go slow as state governments were still grappling to find out how to deal with multinational companies.
"Diamond mining is still at its infancy and the problem is one has to deal withstate governments, which are new to reforms," Stupple said. It will take at least three-four years before "rationalisation" sets in this sector, Stupple added.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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