Global giant Mittal revives Bellary project

Bellary: Back in April at an election rally in Bellary, then BJP national president Rajnath Singh said ore-rich Bellary will be transformed into the ‘steel city of India’ if the BJP-led NDA is voted to power.

Now that the BJP is in government at the centre, Bellary moved one step closer to earning its new moniker with the global steel giant Arcellor Mittal signaling it was ready to move on plans to set up a steel plant here by beginning the fencing of 2,800 acres of land earmarked for the $6.5 billion 6 mtpa steel plant and a 750 megawatt power plant in Bellary.

If all goes smoothly, it will be the company’s first project in India, since its proposed $10-billion Jharkhand steel project, announced in 2005 hit a snag, and its second project, the 12 million tonne per annum (mtpa) steel plant in Odisha was called off due to land acquisition and clearance woes.

Mittal’s Bellary project is the first sign of the ‘Modi Sarkar’ at work in Karnataka. One of Modi’s main election planks was the promise to crank up manufacturing to create millions of jobs by focusing on exporting steel, not iron ore as he spelt out during his election rally in Jamshedpur in April.

Mr Modi said in the steel city, “The government in Delhi (UPAII) is such that it exports iron ore but imports steel. If you run your business like this, how will the country's steel industry survive?”

The Karnataka government has already given the clearance for the use of water from the Tungabhadra River for the project. According to the annual report of the company, it has already initiated a draft feasibility report for the contemplated steel plant that has been completed and hydrological and environmental impact assessment studies have been started.

Reliable inside sources said that more clarity on the timeline of the Mittal's Bellary plant construction can only be obtained when it gets a captive mine in the state. It could start to construct the plant within six months of acquiring a captive iron ore mine.

Sources said that company had applied for mining leases, although following a recent Supreme Court order relating to illegal mining activities in the state and pending a new mining law by the Centre, allocation of new mining leases in Karnataka has been put on hold.

However, the company is hoping to acquire mines in the auctioning of the ‘C category’ iron ore mines which is to take place in the state, under which 51 mines are slated to be auctioned based on a Supreme Court order. Besides, the company is examining the tie-up option with local mine operators to ensure ore availability.

By fencing the Bellary land, anaylists say that Arcelor Mittal, a foreign steel company in India is a step ahead of its other foreign rival, South Korean Posco. Land for Arcelor Mittal’s Bellary plant is located in an industrial belt next to the country’s largest steel maker-JSW Steel Ltd.

Soon or later, industry analysts say that Arcelor Mittal’s Bellary project is bound to face stiff competition from its neighbour JSW Steel Ltd in acquiring further land, captive mine and water.