By K.G. Sreenivas, IANS
Vitoria/Belo Horizonte (Brazil) : Arcelor Mittal, the world’s largest steel maker, has set its eyes on Orissa and Jharkhand as the focus areas for investments worth $20 billion in India and will use units in Brazil as the template for these mega projects, officials here said.
The company, led by London-based Indian industrialist L.N. Mittal, will also set aside a cash chest of $200-$300 million for rehabilitating people who would be displaced after acquiring land for the steel projects.
“Even though we are still discussing the figure, we would see the compensation in the range of $200-$300 million – and far more significant than our projects worldwide,” said Remi Boyer, vice president of corporate communications.
“Our commitment to social sectors in terms of community development, healthcare and education across 28 countries amounts to $60 million. What we are looking at is a figure nearly four-five times higher than that,” Boyer told IANS.
“Corporate social responsibility is central to our business model,” he added at a familiarisation visit for Indian media to Arcelor Mittal facilities in Brazil.
The group plans an investment of $20 billion for the two projects in Orissa and Jharkhand out of a total of $35 billion worldwide and hopes to produce over 24 million tonnes of steel in four phases in India.
In Orissa alone, the company hopes to acquire an additional 3,000 acres of land to the 7,000 acres already sanctioned by the government. South Korea’s Posco is also setting up a 12-million tonne steel unit in the state.
According to José Armando de F. Campos, chief executive officer of Arcelor Mittal Brazil, the group’s facilities at Tubarao in the state of Espirito Santo on the east coast will be the template for India projects.
“Our Brazil project is a symbol of what Arcelor Mittal stands for,” said Campos. “We’re talking of sustainable development and energy self-sufficiency while manufacturing world-class steel.”
He said the Tubarao plant produces 480 MW of electricity and sells a surplus of 100 MW to the domestic market even while manufacturing 7.5 million tonnes of flat steel products.
“Cogeneration of electrical energy from gas emitted during production is a model we will look at in India as well,” he said.
“We have 126,000 hectares of man made eucalyptus forest at Jequitinhonha,” said environment specialist Roosevelt de Paula Almado. “Charcoal will lessen dependence on strategic raw materials, help sustainability and cut emissions.”
The Tubarao plant, which makes the full range of steel products, generated net revenue of $2.8 billion before interest, depreciation and taxes in 2007 while contributing to over 30 percent of total domestic production of Brazil.
Arcelor Mittal officials said three key factors have driven the group’s India mission – good costs, competitive advantage in a highly skilled labour force and rich iron ore deposits.
“Operational excellence, better management and sustainability would be takeaways from Brazil for our India projects,” Boyer said.
Asked about the change in the style and substance of Arcelor Mittal after the merger of the two groups, company officials said it was clearly a union of synergies to create a win-win outcome.
“Arcelor, though conservative, brought to the table good management practices while Mittal brought in dynamism, aggression and decisive leadership,” said an official.
With over 320,000 employees in more than 60 countries, Arcelor Mittal controls about 10 percent of the global steel production and registered an earnings of $14.6 billion in the first nine months of 2007.