In the biggest foreign investment pullout, world's largest steel maker ArcelorMittal on Wednesday scrapped its USD 12 billion (Rs 50,000 crore) steel plant in Odisha over inordinate delays, problems in acquiring land and securing iron ore linkages.
The developement comes just a day after South Korean steel major Posco pulled out of its Rs 30,000 crore steel mill in Karnataka and the government widened its doors to foreign direct investment for a dozen sectors.
Steel baron Lakshmi Mittal-headed ArcelorMittal's proposed plant in Odisha was among the biggest foreign direct investments India has attracted.
Two other plants — Rs 52,000 crore steel mill of Posco in Odisha and Rs 50,000 crore steel mill of ArcelorMittal in Jharkhand are the two other largest FDI India has attracted. Both the projects are also facing inordinate delays.
"ArcelorMittal has met today with the Government of Odisha's Chief Secretary to inform him that the company has decided not to progress with its planned construction of an integrated steel plant and a captive power plant in the district of Keonjhar," the company said in a statement.
However, the company will continue to pursue its other two projects in Jharkhand and Karnataka, it said, adding that "both of which are making steady progress".
In 2006, ArcelorMittal had signed a memorandum of understanding (MoU) with the Odisha government to set up a 12-million-tonne steel plant in four phases at Keonjhar, entailing an investment of USD 12 billion (Rs 50,000 crore).
The MoU was due for renewal since December, 2011. "Over the last seven years we have invested considerable resources into this project. However, the delays relating to land acquisition and allocation of captive iron ore blocks means this project is no longer viable," said Vijay Bhatnagar, executive vice president and member of the management committee, CEO of India and China for ArcelorMittal.