Arcelor Mittal, the world’s biggest steel producer, has planned a foray into power generation in India. This will be the L N Mittal-promoted group’s second project in the energy sector; it has 49 per cent equity in HPCL-Mittal Energy Ltd that is implementing a petroleum refinery project in Bhatinda, Punjab.
The steel major had hired Prosad Dasgupta as chief executive officer of its power division, a person associated with Mittal’s new venture . Dasgupta was, till recently, managing director and chief executive officer of Petronet LNG Ltd (PLL), the country’s biggest liquefied natural gas importer.
India-born L N Mittal already has a small presence in the power sector through LNM India Internet Ventures. The company holds 8.79 per cent stake, currently valued at over Rs 513 crore, in Indiabulls Power, which is developing thermal power projects with a capacity of 6,600 Mw.
The person, who did not wish to be identified, added that ArcelorMittal was likely to set up thermal power plants to begin with and at a later stage may consider gas-based power plants. He did not give details of capacity and location for the proposed venture.
A spokesperson for ArcelorMittal said the company was looking to create a team to build captive power plants to serve its proposed steel manufacturing facilities in India. “Such power plants are expected to be built in Jharkhand, Orissa and Karnataka, based on thermal coal linkages,” the spokesperson said in an emailed response.
| POWER PLAY The L N Mittal-promoted group to focus on thermal captive plants Hires ex-chief of Petronet to head power division Jharkhand, Orissa, Karnataka likely locations Most steel makers are into power generation The sector offers growth avenues in India |
Traditionally, most steel producing companies are also present in power generation, mainly for meeting captive requirement. Through its power foray, the L N Mittal group will be joining the company of Tatas, the Ruia-promoted Essar group, Sajjal Jindal’s JSW Steel and Naveen Jindal’s JSPL, who are present both in steel and power generation businesses in India.
IThe power sector in India is perceived as a growth opportunity, even as the current situation is characterised by shortages in terms of peak power demand and overall supply. The peaking and energy shortages during 2009-10 on an all-India basis were 13.3 and 10.1 per cent, respectively. Shortages in many states are much more than the national average. With growing demand, huge capacity addition is required, which has thrown open growth avenues for industrial houses.
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