NEW DELHI, India — The world’s largest steel maker ArcelorMittal is threatening to scrap a 20-billion dollar project to build two major steel plants in eastern India because of problems with land acquisition.
Chairman Lakshmi Mittal was quoted in Monday’s Financial Times as saying that delays in purchasing the land from farmers and others in the states of Orissa and Jharkand were “unacceptable”.
“If we cannot make progress in these two sites, we will have to abandon the idea of starting the projects there and look for other places in India for our expansion,” Mittal told the newspaper.
The saga has echoes of the problems encountered last year by India’s largest vehicle maker Tata Motors which was forced to shift the plant for its new, cheap Nano car from West Bengal to Gujarat amid farmers’ protests over land acquisitions.
India’s industrial expansion faces a problem in purchasing agricultural land for development, with farmers often unwilling to sell and regional politics fuelling local anger at perceived commercial exploitation.
Mittal told the Financial Times that people in India needed to be “educated” to understand the collective benefits of industrial development.
The two plants envisaged by ArcelorMittal would jointly produce around 24 million tonnes of steel by 2015.
Orissa Chief Minister Naveen Patnaik described Mittal’s warning as unexpected.
“This is surprising as we have not received any communication so far from ArcelorMittal to move out from their proposed steel project here. On the contrary, we have been trying our best to facilitate the project,” Patnaik told AFP.
“We want to get over (the) land acquisition problem in a peaceful manner and to mutual satisfaction,” he added.
Thousands of people from 17 villages that will be affected if the plant goes ahead in Orissa’s tribal district of Keonjhar have been holding regular protests against the proposed purchase of their land.
