Projects shelved over delays

Slowdown in steel demand, coupled with issues over land and mine acquisition, has forced steel makers such as Posco and ArcelorMittal to scrap projects and review their India plans. South Korean steel giant Posco has called off its decision to invest Rs.32.30 billion to set up a 6-million-tonne-per-annum steel plant in Karnataka. The decision follows prolonged delay in the acquisition of land by the state government at Halligudi, in Gadag district. Posco now has two proposals for steel plants in India – a 12-million-tonne plant in Odisha and a three-million-tonne plant at Bokaro, a JV with SAIL. In a similar move, another steel giant ArcelorMittal has decided to drop its plan to set up a 12-million tonne steel plant in Odisha, citing inordinate delays in land acquisition and allocation of iron ore mines. ArcelorMittal had initially entered into an MoU with the Odisha government in 2006, for a 12-mt integrated steel making facility and a captive power plant, at an estimated cost of Rs.400 billion. This was to come up at Patna in Keonjhar district. It did not make progress because of stiff opposition from villagers to land acquisition. Meanwhile, the outlook for the steel industry continues to be dull with hardly any capacity expansion. From 60 million tonnes in 2007-08, steel production capacity in India increased to just 91 million tonnes in 2012-13, the slowest pace in five years, with most of the additions coming from brownfield projects.