Mittal Steel, the world’s top steel maker, will build a 12-million-tonne steel plant in eastern India, a top government official said.

Mittal will invest 450 billion rupees ($10.2 billion) to mine iron ore and build the steel plant in Jharkhand, S K Satapathy, the state’s industry secretary, said.
The project deal was signed recently by the state chief minister Arjun Munda and the London-based founder and chairman Lakshmi Mittal. The plant will be Mittal’s first in India, his birthplace.
Steel-making and mining firms have been drawn to India’s steel industry because of its affordable labour and the world’s third-largest deposits of coal and iron ore. Mittal is the second foreign steel maker to sign a deal in India to turn its iron ore reserves into steel, demand for which is expected to boom with India’s economy, Asia’s third largest and growing at about 7 per cent a year. In June, South Korea’s POSCO signed a deal for a $12 billion steel project in the eastern state of Orissa, a record foreign direct investment for India.
Jharkhand government officials said Mittal would initially build a 6-million-tonne steel plant, which will be doubled later.  “The project should come on stream in 48 to 54 months,” Satapathy said.
Mittal will also get a committed supply of 600 million tonnes of iron ore from the state’s Chiriya mines for 30 years, he added.  “The mining lease will be renewable for another 20 years.”    
Mittal’s chief operating officer, Malay Mukherjee, said Mittal had no plans to export Indian iron ore, and Satapathy confirmed the deal with Mittal would have no provision for exporting iron ore of any grade or swap of ores from anywhere else in the world.
“There is no question of ore swapping or export. The plant is for domestic market,” he said.
Politicians and domestic steel firms had opposed a POSCO proposal to export iron ore from its proposed mine and steel project in Orissa. POSCO was granted 30-year mining rights by Orissa to supply 600 million tonnes of iron ore to the new plant.
Orissa eventually said POSCO could export low-grade ore up to the equivalent of 30 per cent or what will be consumed by the plant, and import high-grade iron ore instead, which POSCO said was necessary to make high-quality steel.
Jharkhand, with estimated iron ore reserves of 3.61 billion tonnes, had already signed steel project proposals with Tata Steel, India’s second-largest steel firm, and smaller companies such as Essar Steel and Jindal Stainless.