ArcelorMittal plans new steel unit in Odisha, to invest Rs 50,000 crore

By: |
March 5, 2021 4:30 AM

In February, AM/NS India bagged an iron ore mine with estimated reserves of 180 million tonne in Odisha through competitive bidding. The company also has plans to expand the finished steelmaking capacity at Hazira to 12-15 mtpa, according to sources.

This was the country’s largest stressed-asset deal and marked ArcelorMittal’s entry into India’s potentially fast-growing steel industry.This was the country’s largest stressed-asset deal and marked ArcelorMittal’s entry into India’s potentially fast-growing steel industry.

India-born billionaire Lakshmi Mittal is revisiting a plan to set up a large greenfield steel plant in the mineral-rich Odisha. ArcelorMittal-Nippon Steel India (AM/NS India), a 60:40 joint venture between world’s largest steelmaker ArcelorMittal and Japan’s Nippon Steel, on Thursday inked an agreement with the Odisha government to set up a 12 million tonne integrated steel plant in the state’s Kendrapada district with an investment of Rs 50,000 crore, according to a statement issued by the Odisha government.

Mittal and chief minister Naveen Patnaik were present during the signing of the memorandum of understanding at Lokaseva Bhavan.

AM/NS India had acquired Essar Steel’s 9.6 million tonne Hazira plant for Rs 42,785 crore in December via the insolvency route after a protracted process.

This was the country’s largest stressed-asset deal and marked ArcelorMittal’s entry into India’s potentially fast-growing steel industry.

After signing an MoU with the Odisha government in 2006, Mittal had abandoned a plan to set up a 12 mtpa steel plant in Odisha in 2013 over issues concerning land acquisition and iron-ore mining lease. The latest move comes at a time when after a tough year in 2020, steel prices have soared in Europe and hit an almost 10-year high in China, boosting earnings of steelmakers.

“Mittal mentioned that he is very happy to partner with the government of Odisha in setting up this integrated steel complex at Kendrapara, which is in addition to the other investments of AM/NS in Odisha, including the 6 mtps pelletisation plant in Paradeep which will be expanded to 12 MTPA and the beneficiation complex in Keonjhar and slurry pipeline which are already operational,” the state government said.

In February, AM/NS India bagged an iron ore mine with estimated reserves of 180 million tonne in Odisha through competitive bidding. The company also has plans to expand the finished steelmaking capacity at Hazira to 12-15 mtpa, according to sources.

Despite the Covid-19 pandemic, AM/NS India fared better than peers in India in the first three quarters of 2020 since the Hazira unit acquisition – it clocked $423 million as Ebitda in the January-September period. The Hazira unit produced 4.7 million tonne of crude steel during the nine-month period, of which the highest output was in the September quarter, at 1.8 mt.

India’s current installed capacity is around 140 mtpa. The country aspires to have 300 mt installed capacity by 2030-31. India’s per capital steel consumption is still around a third of the global average. India became a net importer of steel for the first time in the current fiscal in January bucking the trend of the first nine months. The trade deficit, however, was marginal at 0.06 MT.

(with Bloomberg inputs)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Apple will start rolling out iOS 14.5 update next week with a privacy feature that will make Facebook unhappy
2Apple M1 iPad Pro, 24-inch iMac, AirTag and second gen Apple TV 4K launched in India: here are all the prices and when you can buy them
3Apple iMac refresh launched with sleek design, M1 chip and choice of 7 colours: Specs, price and everything to know