ArcelorMittal, the world's largest steel-maker, is in discussions with Indiabulls Group to form a joint venture company for scouting and mining iron ore in Rajasthan and setting up a steel plant.
"The discussions are on (between ArcelorMittal and Indiabulls to form a JV company). ArcelorMittal is pitching for a majority stake in the JV company," a person in-the-know
of the development said.
"There are indications of iron ore in Rajasthan. It is a mineral-rich state. The JV company would seek to locate and develop it. Then, a steel plant would be developed in the state," the source said.
According to the source, the JV would be between an ArcelorMittal subsidiary or an investment arm of the Mittal family and an Indiabulls Group firm.
ArcelorMittal Chief Financial Officer Aditya Mittal is said to be the brains behind the proposed venture, which aims at tapping the market for steel in North India, where there is no integrated steel plant.
"Promoters of ArcelorMittal and Indiabulls share a good relationship and the new venture would further their partnership," the source added.
Through LNM India Internet Ventures, it is said that L N Mittal already holds an 8.79 per cent stake in Indiabulls Power, which is developing various power projects across the country.
State-owned SAIL has already discovered iron ore deposits in the desert state.
The proposed investment in the JV could not be immediately ascertained. An ArcelorMittal spokesperson did not revert to a query on the cost of the proposed venture.
ArcelorMittal had in July said it expects to start work on one of its proposed Rs. 1.3 lakh crore India projects in early 2011.
The world's largest steel-maker, accounting for 8 per cent of global production, announced plans to set up projects in Jharkhand in 2005 and in Orissa a year later. In June this year, it signed an MoU with the Karnataka government for a Rs. 30,000 crore steel project.
"We believe that in 2011, in one of the projects, we will break the ground, we don't know which one... It is our hope that it should be in the first quarter or the second quarter," ArcelorMittal Chairman and CEO L N Mittal had said.
The company is in the process of acquiring land for construction of a 12-MTPA steel plant in Jharkhand. The company has proposed a plant of similar size in Orissa.
The company has already been allocated iron ore mines in West Singhbhum district of Jharkhand, where it is awaiting clearances to mine more such deposits. However, it is facing regulatory hurdles and protests over land acquisition in the state. Most recently, it had to move out of the Khunti-Gumla area to a new site near Bokaro on account of such problems.
Last year, ArcelorMittal had entered into a co-promoter agreement with Uttam Galva to produce steel.
This blog has been developed to share current market scenario & different management aspects with anyone interested in learning more about business management. This Blog covers all aspects of Business Management with a particular focus on Marketing,Finance,Human Resource,IT & International Business along with case studies for each specialization.
No comments:
Post a Comment