ArcelorMittal-Indiabulls JV for captive mines likely

L N Mittal's ArcelorMittal, the world's largest steel-maker, and financial services and infrastructure major Indiabulls Real Estate are planning to form a joint venture for mining coal and possibly iron ore as well. The move is aimed at owning captive mines for the two companies' businesses.

''It is essentially a mining joint venture to meet our coal requirement for power projects,'' Indiabulls chief executive officer Gagan Banga said. ''The joint venture will look at all mining opportunities that will be offered in India, while coal and iron ore are the two minerals we will be mainly interested in.''

Indiabulls has power plants, while ArcelorMittal needs captive fuel for its steel plants.

Banga declined to elaborate on likely investments, while saying that mining operations will be carried out through special purpose vehicles.

The move to form a joint mining venture is the latest by ArcelorMittal to establish a presence in the Indian steel market, considered the world's second-largest after China. ArcelorMittal, which alone accounts for 8 per cent of global steel production, had announced plans to set up steel projects in Jharkhand in 2005 and Orissa in 2006. However, not much progress has been made owing to delay in iron ore linkages or in acquiring land.

In June this year, it had signed an MoU with the Karnataka government for a Rs30,000-crore steel project, which is yet to take off. To counter such delays, ArcelorMittal formed a co-promoter agreement last year with Uttam Galva, a listed Indian steel company, to produce steel.