New Delhi: An estimated Rs 5,000-crore joint venture between steel giant ArcelorMittal and state-run SAIL is most likely to be finalised this year with the Steel Ministry working towards formalising the project.
"We have signed an MoU (memorandum of understanding) with ArcelorMottal for a steel plant. We want to finalise the project this year. Work on it is progressing," Steel and Mines Minister Narendra Singh Tomar told PTI.
In May last year, ArcelorMittal, led by NRI billionaire Lakshmi Mittal, and domestic steel giant SAIL inked the memorandum of understanding to look at the possibility of setting up an automotive steel plant in the country.
The proposed JV will construct a cold rolling mill and other downstream finishing facilities in India, touted as one of the fastest-growing automotive markets in the world with production expected to double between 2014 and 2020, from 3.6 million units to 7.3 million units.
A senior government official said that if the project is operationalised, it will be a double win for India.
"One it will give a major boost to the 'Make in India' programme. Second, it will help us in further improving our world production ranking and inch closer to the number two spot," the official added.
In August 2015, ArcelorMittal's head of global automotive and commercial coordination Brian Aranha said, "It's early days, and it could take between 18 months and two years for the MoU to become a formal joint venture, but we've certainly signaled our intent."
He added that the potential automotive-focused steel joint venture in India represents a "natural next step" in the firm's global growth plans.
In an investor presentation given in June, ArcelorMittal had said that the proposed steel plant will come up at a major auto cluster in India.
India has four major auto clusters including the Pune-Chakan belt in Maharashtra and the Gurgaon-Neemrana belt spread across Haryana and Rajasthan.
The world's largest steelmaker expects India to grow as a hub for automobile export manufacturing facilities to cater to the international market and establishing an automotive focused production presence in India is a natural progression in executing its global automotive strategy.
The move is considered to be a big one for ArcelorMittal, which is trying to enter India after failing for a decade to set up plants at Odisha and Jharkhand. Its work on the $6.5 billion Karnataka plant is yet to take off.