ArcelorMittal's plan to set up two greenfield steel plants in India has been delayed by at least two years on account of problems in securing land and mines and the recent economic slowdown.
The company was earlier hopeful of bringing the projects onstream by 2012. It is now looking at adding lower capacity in the first phase.
"Production will not start before 2014. The top reason is the economic downturn. The second reason is procedural delays," Vijay Kumar Bhatnagar, chief executive officer of the company's India operations, told reporters on the sidelines of a steel conference organised by industry body Ficci.
The ongoing economic slowdown has prompted steel producers worldwide to shelve new projects and scale down output as demand weakens from housing, automobiles and consumer durable sectors.
The company plans to set up two steel plants with a combined capacity of 24 million tonnes in Orissa and Jharkhand. "Our confidence in the country continues and we do not plan to scale down the size of the project," Bhatnagar said.
In Jharkhand, of the 10,000 acres land required for the project, the company has acquired only about 1,000 acres. It has not acquired any land in Orissa yet.
The company had estimated an investment of $20 billion in these projects. However, given the recent dip in equipment cost, the company is re-assessing the figure.
"The equipment cost will be lower but the cost of capital will be higher. We are in the process of re-assessing the investment," he said.