DNA reported that ArcelorMittal’s plan to establish a manufacturing facility in India will be delayed because of the decreasing demand for the metal due to the global economic slowdown.

Mr Vijay Bhatnagar CEO of ArcelorMittal’s India said that “There will be some impact on our expansion plans in the short term as we have to align the commissioning of capacity with the demand,” adding that there has to be demand for the product when the plant is commissioned.

Mr Bhatnagar on sidelines of 7th edition of the International Exhibition on Metals, Minerals, Metallurgy and Materials said that the slowing demand would however not affect the company’s ongoing land acquisition and environmental and other clearances.

He said that the total investment for the two proposed units was originally pegged at USD 20 billion. The company however is facing a cost overrun of about 50% in India. ArcelorMittal’s long term strategy in India is however intact. He added that some people will find a serious threat in the slowdown, whereas some will find opportunities, adding that the investment in the Indian units will be carried out in phases, as planned originally.

He further added that it is not facing any problem in sourcing coking coal, a key input needed to make steel, as being a global setup, it can procure the fossil from any region

ArcelorMittal is building a steel plant in Jharkhand, which was earlier scheduled to be commissioned in 2012 with an initial capacity to produce 6 million tonne of steel per annum, eventually going up to 12 million tonne per annum. It plans to build another production facility in Orissa with a capacity to make 12 million tonne of steel.