In a major setback to India's foreign direct investment initiatives, the world's largest steel maker, ArcelorMittal,has abandoned a 12 billion U.S. dollar project of building a steel plant in the eastern state of Odisha, citing indefinite delays in acquiring land and an iron ore mine.
The company, headed by Indian-origin steel magnate
Lakshmi Mittal, had in 2006 agreed to manufacture 12 million tonnes of steel a year in Odisha. But it has now decided to scrap
the plan, close to the heels of South Korean steel giant Posco scrapping a 5. 3
billion U.S. dollars project in southern India.
"ArcelorMittal has not been able to acquire the
requisite land for the steel plant, nor has it been able to ensure captive iron
ore security, which is a necessary requirement for the project,"
the company has said in a statement.
"Therefore, taking into account the current economic
climate, ArcelorMittal has concluded it will no longer be pursuing its plans for a steel plant
in Keonjhar (in Orissa) at this stage," it added.
Farmers in Keonjhar have been protesting against the
forceful acquisition of land by the state government for ArcelorMittal, saying they are
being compelled to sell land at below market rate.
