NEW DELHI: Lakshmi Mittal, the world’s fifth richest man, has given a £5bn vote of confidence in the country of his birth by announcing plans to build his first steel plant in India.
Mr Mittal, who was born in India but left the country to create the largest steel company of the world, said he wanted to “partner the growth of India”. The steel magnate, who retains his Indian passport, moved to London in 1995 partly to keep track of his far-flung empire.
Last week the 56-year-old’s audacious €29bn takeover bid for Arcelor, the world’s second biggest steelmaker, succeeded despite hostility from the governments of France and Luxembourg, where many of its plants were based.
India’s trade minister described the opposition as thinly veiled “racism”. Mr Mittal now controls 120m tonnes of steel production — a tenth of the global supply and four times his nearest rival. “I am very grateful for all the support that friends, family and the Indian government gave to me,” he said.
Mr Mittal made it clear the strategy of the new company, Arcelor Mittal, would look to India and China for growth. Mittal Steel is in talks to buy 49% of one Chinese company and has spent £180m on another. But his Indian operation will dwarf these Chinese investments. The plants were slated for mineral-rich plains in eastern India’s Jharkhand state but he has switched attention to neighbouring Orissa on the country’s coast. The plant will produce 12m tonnes of steel a year.
“We are re-evaluating our position. The progress [in Jharkhand] is not as satisfactory as we would like it to be,” Mr Mittal said.
The Indian government has also signed up its favourite billionaire son to secure energy supplies for the country, convinced his deal-making skills and international contacts will help buy assets abroad. The joint venture OMEL, which began last year, is half-owned by Mittal Steel and India’s state-run Oil and Natural Gas Corporation, and has recently won two lucrative oil fields, with reserves of 1bn barrels of recoverable reserves, in Nigeria. “[OMEL], I think, is a good example of how [state-run Indian firms] can go global,” Mr Mittal said.—Dawn/The Guardian News Service
