(Bloomberg) -- Billionaire Lakshmi Mittal is revisiting a plan to set up a steel plant in the mineral-rich eastern Indian state of Odisha with an investment of $6.9 billion, after abandoning an earlier attempt to build a mill in the province.
ArcelorMittal Nippon Steel India Ltd. has signed an accord to build a steel plant in the state with an investment of 500 billion rupees ($6.9 billion), Chief Minister Naveen Patnaik's office said in a Twitter post. Federal Steel Minister Dharmendra Pradhan said on Twitter earlier this week that he had “good conversations” with Mittal. The planned unit will have an annual production capacity of 12 million tons.
ArcelorMittal had previously attempted to build a similar capacity plant in the state more than a decade ago but ditched the plan in 2013 due to its failure to get suitable land and necessary permits to mine iron ore, a key raw material. This time around, Arcelor already has a foothold in India after tussling for more than a year to buy Essar Steel India Ltd.'s assets under the bankruptcy process in 2019.
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. Shares of ArcelorMittal have more than tripled since a bottom in March last year, and stronger prices of the metal signal further scope for gains.
Mittal's move to expand in India comes at a time when the government is planning to boost investment in sectors such as housing, roads, ports and railways. On the other hand, the company is focusing on consolidating operations globally, selling its North American operations to Cleveland-Cliffs Inc. and shuttering an unprofitable furnace in Poland.
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