- ArcelorMittal still awaiting permission from Karnataka state government to set up a solar power plant on the site meant for a steel plant
- The company had originally planned to set up a steel plant at Bellary in Karnataka, but now wants to build a 600 MW solar power plant
- Change in strategy owing to oversupply of steel in the global market, and uncertain iron ore availability locally
- State government is yet to take decision on the request
Steel and mining company ArcelorMittal S.A. is still waiting for permission from the State Government of Karnataka to set up a solar farm of up to 600 MW capacity on land meant for a steel plant. It has been more than a year since the steel giant expressed its interest in setting up the same.
The state government had been approached by the company for permission for change in land use. However, the former had reportedly stated back then in February 2016 that it is encouraging only those investments that have a ‘fair chance of fructifying’.
ArcelorMittal had signed a memorandum of understanding (MoU) with the State Government of Karnataka in June 2010. As per this MoU, the company had envisaged constructing a 6 million ton steel plant. It was reportedly set to come up at Kuditini in Bellary of Karnataka. There was also provision for a 750 MW power plant for captive consumption. In total, it would have meant an estimated investment of $6.5 billion.
In its Annual Report for 2016, ArcelorMittal stated, “The company has completed all of the necessary steps to acquire the land. ArcelorMittal India Limited received possession certificates for 2,659 acres of private land following the acquisition of 1,827 acres and 832 acres in December 2011 and October 2012, respectively, leaving a balance of 136.33 acres of land owned by the Karnataka Government, which is being processed for allocation.”
The management is mulling this strategy shift owing to ‘excess capacity of steel worldwide and uncertainty in iron ore availability locally’, stated the firm in its Annual Report. Setting up a solar farm would ‘contribute to the mitigation of Karnataka’s power crisis and to the participation in the National Solar Energy mission of the Government of India’.
This is not the first time a company has thought of replacing their main business activity with a solar farm. Last year, thermal based power plant developer RattanIndia announced that it wanted to switch to develop 200 MW solar power plant in Punjab, on a site meant for a thermal plant.