ArcelorMittal to set up plant in Karnataka for Rs 30K cr

Excerpts from Reporter's Diary on CNBC-TV18 Watch the full show » RELATED NEWS ArcelorMittal seeks new sites in India after land delays K'taka woos ArcelorMittal for steel plant: Sources Nifty BSE | NSE 09/02/12 Are Mutual Funds betting on Nifty?

CNBC-TV18 reported a month back that ArcelorMittal was in high level talks with the Karnataka government for a large scale investment in the state. Now it has learnt from sources that the company has zeroed in on Karnataka for its Greenfield plant - an integrated steel plant and also a captive power generation unit. The investment figures are roughly around Rs 30,000 crore over the next three-four years. This is most likely to be a 6 million tonne steel plant with a size of about 4,000 acres. The location has not been finalized at the moment. However, most likely it will be somewhere in north Karnataka due to the rich iron ore resources there, reports CNBC-TV18's Vineetha Athrey. 

The company has already submitted an application to the Karnataka Government to this effect. On November 27, Vijay Bhatnagar, Chief Executive Officer of ArcelorMittal India is likely to come down to Karnataka to meet with the government officials. On the same day, the screening committee will meet to discuss the proposal in greater detail and to flesh out more details.  

The same proposal will be submitted to the high level committee to take a final call on this particular project.

In an interview with CNBC-TV18, Vijay Kumar Bhatnagar, CEO, ArcelorMittal India spoke about the company's plans.

Here is a verbatim transcript of the exclusive interview with Vijay Bhatnagar on CNBC-TV18. Also watch the accompanying video.

Q: We understand that you have decided to set up a Greenfield plant in Karnataka. Can you tell us what kinds of investments have been planned? 

A: We have not finalised plans; we have just applied for approval of our proposed steel plant in Karnataka to the state government. And setting up an integrated plant would finally depend on a host of techno economic factors. So, therefore we will start a technical study. It may take about 3-4 months time and then we would be in a position to disclose more details on costs, capacity and timeline et cetera. 

Q: Could you give us a sense of what the size of the project is going to be? And where is it likely to be located? 

A: This is likely to be located in Northern Karnataka. We are still exploring the exact site, but it will be in North Karnataka. The ballpark numbers would only depend upon after we decide on the exact capacity. So for that we need to wait a little bit more. 

Q: When you say integrated project does that include a captive power generation capacity as well? 

A: Yes. An integrated plant will have a captive power plant. 

Q: What were the factors that tilted the scales in favour of investing in Karnataka? 

A: As a matter of fact, we were constantly exploring the opportunities. And we did get an invitation from the Karnataka government and therefore we looked at it critically and we found that it makes sense. Therefore, we applied last week for our proposal, our intent that we want to put up a steel plant in Karnataka. So I think that was that. 

Q: What happens now, now that you have already spoken with the state government? When are you likely to take a final call and we would like to know about your Orissa and Jharkhand plans?

A: Yes we will be meeting the government. Actually we have been meeting the government over the last week or so. But we will meet the government in the coming this week, next week et cetera. We will undertake a technical study which may take about three-four months and only after that we will be in a position to talk about our exact plan.