Mittal abandons mega for mini in India

Multiple failures in India have forced ArcellorMittal's Lakshmi Mittal to settle for the small.

Steel baron Lakshmi Mittal believes ArcelorMittal8217;s two giant steel projects in India,planned since 2005,were 8220;highly unlikely to be realised8221;,and said his new strategy is to have a number of smaller steelmaking hubs.

In an interview to the Financial Times in Tokyo,Mittal has said that his new strategy was to create many small steelmaking hubs across the country each capable of making a few million tonnes of steel a year.

8220;My plan is now to have 2-4 sites rather than concentrate everything on large plants,8221; he told FT.

ArcelorMittal had announced a 12 million tonne steel plant in Jharkhand in 2005,followed by an identical plant in Orissa in 2006. But they are yet to take off owing to problems with land acquisition and other clearances.

Mittal,however,added that he was still 8220;determined to participate8221; in the steel industry in India where demand for the metal is increasing quickly as a result of new investments in industrial expansion and infrastructure development.

Last year,the company announced plans to set up a smaller steel mill in Karnataka. Proposed investments in the India projects totals over Rs 1,00,000 crore.

Meanwhile,Mittal has urged China to relax its investment rules.

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8220;You cannot expect business people in the US to be relaxed about planned inward investments by Chinese companies if their attempts to do the same thing in China are covered by restrictions,8221; he told the financial newspaper.

The statement was on the heels of a row in the US over a planned participation by Anshan Iron amp; Steel,one of China8217;s biggest steelmakers,in a USD 168 million venture to build a steel plant in Mississippi by John Correnti,a veteran US steel executive.

Mittal8217;s own efforts to expand in China have been hampered by Beijing8217;s inward investment rules. So far,he has been allowed only to take minority stakes in two medium sized China-based steel producers,rather than take control of large ventures,as he would have liked,the report said.

The Chinese government has refused to allow non-Chinese companies to take majority stakes in business fields that Beijing regards as 8220;strategic8221; to the country8217;s long-term interests,one of which is the steel industry.