Following is an excerpt from a report in Times of India about this.

… “We have received a proposal from Arcelor-Mittal, requesting for an arrangement with OMC,” confirmed a senior officer. “The government is exploring the possibilities and details remain to be worked out. It could mean a long term agreement or a joint venture between the two parties,” the officer told TOI. The government, sources said, has set up a four-member committee headed by chief secretary to examine the proposal’s feasibility and chalk out the draft terms and conditions.

Sources said Arcelor-Mittal is yet to submit any application for prospecting lease or mining lease for any iron ore deposits, but evidently does not want to take chances. Hence, it has proposed a tie-up with the state-owned body to serve as a back-up. “The company would no doubt go for captive mines. The pact with OMC would ensure an alternative raw material arrangement for the company’s project,” sources pointed out. Orissa has so far inked pacts for 46 steel facilities, sparking doubts over iron ore scarcity in future.

Arcelor-Mittal, which has signed an MoU with the state government to set up a 12 MTPA steel plant at an investment of Rs 40,000 crore, is the first major player to make this kind of a proposal. Some small steel units had earlier sought to enter into raw material supply agreements with OMC, apparently to ensure a steady flow of iron ore and offset price fluctuations. Some steel plants, which have reached production stage, are buying ore from the market at higher prices, sources disclosed.