Amid sharp decline in steel demand due to global economic slowdown, steel giant ArcelorMittal may half the size and slash its investment for the first phase of its INR 1,00,000 crore projects in India.

The world's largest steel maker also sees a delay of at least two years in commencing production from its proposed plants of capacity 12 million tonnes per annum in Jharkhand and Orissa each.

Mr Vijay Bhatnagar CEO of ArcelorMittal India on the sidelines of a FICCI steel summit told reporters that "Initially we were thinking of putting six million tonnes per annum steel plant in phase one. We may now put up smaller plants. We could cut the size to 3 MTPA in each phase due to the slump in steel demand and other issues, including land acquisition problems in India. Investments could naturally come down in the same proportion.”

He however clarified that overall plan to reach 12 million tonne per annum capacity at each plant in Orissa and Jharkhand has not been changed.

Mr Bhatnagar said that due to slow land acquisition for the projects and global downturn, the company would overshoot the 2012 deadline to commence production in India.

He added that "We already have a process of acquiring mining and land. It turned out to be much more slow than what we expected in the beginning and then on top of it we have the unexpected global slowdown adding our estimate is that projects are getting delayed by minimum two years."

(Sourced from Zeenews.com)