ArcelorMittal turns operating licence into holding co
June 15, 2008
June 15th (Economic Times) – Close on the heels of bagging its first iron ore mining licence, the world’s largest steel company, ArcelorMittal, is set to deepen its engagement with India. The steelmaker will convert its operating company into an operating-cum-holding company.
The decision follows a formal nod to its proposal from the finance ministry last week. The company’s proposal was among a total of 13 proposals approved on Thursday, June 12. Earlier in the week, the company received allotment for iron ore mining licence on 500 acres at Karampada in Jharkhand’s West Singhbhum district.
“The conversion of our operating licence into a holding company is part of a standard procedural requirement to participate in joint ventures for coal mining. However, it signifies a step forward for ArcelorMittal terms of its involvement in India,” a company source said when contacted by ET. This would result in a FDI inflow of Rs 41 lakh.
Last November, the Centre had allocated coal mining rights to ArcelorMittal in Jharkhand, along with GVK Power Ltd, on sharing basis.
The company has also been given coal block in Orissa. While the steel giant has been given a coal block at Seregarha in Jharkhand, it has been allotted Rampia and Dip side of Rampia block in Orissa along with partners like Sterlite Industries. Both the blocks will generate coal to produce 750 mw of power each.
As part of that allotment, the government had stipulated that ArcelorMittal would have to convert its operating company into a operating cum holding company in order to make further downstream investment.