BHUBANESHWAR, Dec 21: The world’s largest steelmaker Arcelor Mittal on Thursday signed a $8.7 billion project with the Orissa government to build a steel plant in the eastern Indian state, officials said.

Mittal Steel, which acquired European steelmaker Arcelor in July in a $32.5bn deal, said the project’s first phase will be completed in 48 months while the final stage would require an additional 54 months.

“We plan to wrap up the detailed project report within six months,” said Arcelor Mittal executive Malay Mukherjee, who signed the memorandum of understanding with the state government.

“We will make Indian steel globally competitive,” he said at the signing in the state capital Bhubaneshwar.

The operation, the first Indian operation of the European firm, is slated to eventually produce 12 million tons a year and will create 5,500 direct and 15,000 indirect jobs.

The plant will cost an estimated $8.7 billion and will be situated on a 8,000 hectare site in mineral-rich Keonjhar district.

It will annually draw 125 cubic metres of water from two local Orissa rivers and would require 600 million tons of raw materials for the first 30 years, it said.

Arcelor Steel will also build its own power station at the site to generate 750 megawatts of electricity daily, Mukherjee added.

Orissa, which has a quarter of India’s iron ore reserves, has witnessed a rush by both Indian and international players to invest in large steel plants there. India currently produces about 35 million tons of steel.

But the road for some has been bumpy with South Korean steel giant POSCO, which signed an agreement in June last year to build a 12-million-ton steel plant in the state, yet to be allotted land because of farmer protests.

Mukherjee said his global group will try to address local concerns.

“We are aware of protests against mega-industries in Orissa but our approach is different and we will certainly satisfy society and take all possible measures to involve the local population,” he said.

Mukherjee said the group also planned to build a similar-capacity plant in adjoining Jharkhand state despite legal wrangles with the state-run Steel Authority of India Ltd (SAIL).—AFP