London/New Delhi: NRI billionaire Lakshmi Mittal-led ArcelorMittal today partnered PSU giant SAIL to set up an automotive steel plant with an estimated Rs 5,000 crore investment, taking a fresh shot at entering India after nearly a decade-long wait for its earlier projects to take off.
The details of the investment and plant size were not disclosed. However, a source said the plant size discussed is “1.5 million tonne (MT) and the investment could be in the range of USD 850 million”.
“The proposed JV will construct a state-of-the-art cold rolling mill and other downstream finishing facilities in India that will offer technologically advanced steel products to India's rapidly growing automotive sector,” ArcelorMittal and SAIL said in a joint statement.
“We can't put a definitive timetable on this project. However, as a broad guide...it could take up to two years to carry out all necessary due diligence and cement our relationship into a formal joint venture company,” a Steel Authority of India spokesperson told PTI.
The project needs formalising the JV structure, assessing the various options regarding potential plant locations, costing the project and so on.
The MoU towards setting up the JV was signed by Lakshmi Mittal, Chairman and CEO of ArcelorMittal, and SAIL's Chairman CS Verma.
The move is being viewed as a big step for ArecelorMittal which has been trying to make inroads into India after failed attempts to set up plants at Odisha and Jharkhand. Its work on USD 6.5 billion Karantaka plant is yet to take off.
The JV proposal comes at a time when South Korean steel giant POSCO is also in talks with SAIL to set up an integrated steel plant.
Steel Secretary Rakesh Singh said: “Increasing the availability of indigenously produced automotive steel would reduce India's reliance on imports and provide the Indian steel industry and the automotive industry with a sustainable competitive advantage.”
He added that India is expected to grow as a hub for automobile export manufacturing facilities to cater to the international market. “This proposed collaboration between ArcelorMittal and SAIL is a positive and welcome step towards fulfilling the objectives of the ‘Make in India' campaign launched by Prime Minister, Narendra Modi.”