Mittal Steel's Jharkhand Foray May Be DelayedPublished by MAC on 2005-08-17
Source: Business Standard, New Delhi
Mittal Steel's Jharkhand foray may be delayed - MoU with Govt delayed over permission for iron ore export
Varun Sood / Business Standard, New Delhi
August 17, 2005
Following the lead set by Vedanta in late 2003, its rival (and superior) in the alumininum stakes is now also planning to list some of its shares outside India to attract investment from the Gulf region. One of the reaons given is a slowdown in demand from China - on which a significant part of India's bauxite/alumininum expansion has been predicated over the past three years
The much anticipated Mittal Steel's memorandum of understanding (MoU) to be signed with the Jharkhand government may have hit a roadblock on the issue of exporting iron ore.
Mittal Steel wants permission to export 30 per cent of iron ore from the mines allotted to the company in the state. But, the state government does not seem to be very receptive to the idea.
'The MoU will not get signed until the issue of 30 per cent exports of iron ore is amicably resolved,' said an official in the Jharkhand government.
A Mittal Steel spokesperson said that the company had never really decided on a date on when the MoU would have been signed. In an email response, a Mittal Steel spokesperson said: 'We have no update on the potential Jharkhand investment. We are still holding discussions and as and when the MoU is officially signed we will make an announcement accordingly.'
However, officials in the Jharkhand government maintain that the MoU was to be signed sometime this month. Sources in the state mining department said the state government seemed to be chalking up an alternative plan, acceptable to both Mittal Steel and the Opposition.
One proposal is that the state government should try to persuade Mittal Steel to lower its demand for exports from 30 per cent to 5-10 per cent. Another proposal might be on the lines of the 'swap deal' followed by Posco, whereby Mittal Steel might be allowed to export low grade iron ore from the state in exchange for importing a similar quantity of high grade iron ore.
Sources also add that the issue of exporting 30 per cent iron ore becomes a thorny issue in wake of the Panchayat elections scheduled in the state later this year.
'Obviously, the government would not like to go ahead with the proposal to allow export iron ore and face the elections at the same time', said the official.
* Mittal Steel wants permission to export 30 per cent of iron ore from the mines allotted to the company in the state
* The MoU has to be signed by this month-end discussions are still on, said a Mittal steel spokesperson
* The state Government is chalking out an alternative plan accptable to Mittal Steel and the Opposition.
* The state Government hopes to persuade Mittal Steel to lower its demand to 5-10 per cent
* Another proposal might be on the lines of the swap deal whereby Mittal Steel may be allowed to export low grade ore against import of high grade ore.