Lakshmi Mittal, ArcelorMittal\'s chief executive, has further confirmed that Indian steel production will remain well below the government\'s ambitious targets for years to come. Last Tuesday at a conference, Mr. Mittal explained how plans to build new steel mills in various states including Karnataka and Orissa have stalled due to the democratic process.

Environmental concerns, difficulty acquiring land, political infighting, and various protests by citizen and lobbying groups have held back the construction of several planned steel mills. According to Mr. Mittal, ArcelorMittal has not been able to move forward with plans to build a 6mt/yr steel mill in Karnataka and a 12mt/yr mill in Orissa. Construction being held back on mills like these are why India has fallen far short of expanding steel production to reach the government\'s goal of producing 120mt by 2012.

Last year, Indian mills produced a total of 71.6mt of crude steel (which is approximately 6mt per month). Going forward, we continue to anticipate that Indian crude steel production will average between 5.9 to 6.3mt per month through at least July.

A near-record amount of steel continues to be produced in India, but the iron ore mining bans in Karnataka and Goa and various democratic nuances continue to hold back growth. However, we do continue to expect that Indian steel production will set new records after October. By then, monsoon season will have come to an end and more iron ore mines are likely to be up and running. Overall, though, we expect Indian steel mills will produce a total of 73mt to 78mt of crude steel this year, which would be a far cry from the government’s 120mt goal.