Karnataka loses a decade-old steel dream as ArcelorMittal moves to Andhra

In another case of Karnataka’s loss becoming Andhra Pradesh’s gain, a plum project the former spent 15 years trying to bag has now officially gone to its neighbour.

On Monday (March 23), ArcelorMittal laid the foundation stone for a massive integrated steel plant in Anakapalle district of Andhra Pradesh, ending any remaining hope that the company would set up shop in Karnataka’s Bellary-Koppal.

How Karnataka lost the plot

ArcelorMittal first proposed a steel plant on the Bellary-Koppal border in 2011, backed by an investment of over Rs 30,000 crore. The state government identified and allocated roughly 1,800 acres.

But since then, the project never moved. For over a decade, it got held up by unresolved mining licences, environmental clearances, and legal tangles. The company eventually returned the land and walked away.

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And, Andhra Pradesh was just waiting to make the grab.

What Andhra Pradesh gets

The plant — formally called the ArcelorMittal Nippon Steel India (AM/NS India) Integrated Green Steel Plant — will come up at Rajayyapet in Anakapalle district. It will be India’s largest greenfield steel facility, spread across 5,645 acres with a total capacity of 17.8 million tonnes.

The plant will be built in two phases at a total investment of Rs 1.36 lakh crore. Phase one targets 8.2 million tonnes annually, with production beginning December 2028. Full capacity of 17.8 million tonnes is expected by late 2031.

It will also be India’s first steel plant to deploy AI, automation and robotics at scale. A captive port adds another layer of scale to the project. It will be built on 316 acres, with 50 MMTPA capacity, for Rs 11,192 crore. Together, the two projects are projected to generate one lakh jobs.

Shadows of displacement and Vizag Steel

While Karnataka may mope that all these have gone to Andhra because clearances weren’t delivered, not all the grass is green on the other side either.

The foundation stone was laid even as residents of six displaced villages — Tammayapet, Tummalapet, Moolaparra, Patimidu, Boyapadu and Chandanada — say their rehabilitation remains incomplete.

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After initial protests, farmers received Rs 18 lakh per acre in compensation, families got 5 cents of land and Rs 9.80 lakh for housing. But demands for Rs 25 lakh in construction support, subsidised materials, and R&R packages for adult daughters remain unmet.

The ceremony has also renewed criticism over the government’s treatment of the Visakhapatnam Steel Plant. EAS Sharma, former Secretary at the Ministry of Energy, said it was deeply troubling that the Centre was providing land, water, port access, and subsidies to a private company while denying Visakhapatnam Steel its own iron ore mine — a step he argued would have returned the public plant to profitability. Workers’ unions and the Opposition have echoed the charge, accusing the government of prioritising private capital over a constitutionally mandated public enterprise.

An intense competition

This is the latest in a series of contests between the two states in grabbing coveted projects. Early last year, Andhra actively sought to attract Tesla to set up an EV manufacturing unit, competing directly with Karnataka’s efforts to lure Tesla to Bengaluru.

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Then, in October 2025, Google signed a deal for a massive Rs 1.3-lakh-crore AI hub in Visakhapatnam, making Karnataka politicians, including IT Minister Priyank Kharge, see red.

The two states also clashed over an aerospace and defence hub after Karnataka struggled with land acquisition. Andhra lobbied hard for future expansions of Hindustan Aeronautics Limited (HAL), particularly the Light Combat Aircraft (LCA) Tejas production.

Kumaraswamy in attendance

On Monday, the foundation ceremony was attended by Andhra Chief Minister Chandrababu Naidu, Deputy CM Pawan Kalyan, IT Minister Nara Lokesh, Union Steel Minister HD Kumaraswamy, and ArcelorMittal’s Lakshmi Niwas Mittal and Aditya Mittal.

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Kumaraswamy, who is from Karnataka, publicly gushed that the project is “a testament to global confidence in India’s policy stability” and linked it to Prime Minister Narendra Modi’s Atmanirbhar Bharat vision. He made no mention of Karnataka’s loss.

(With inputs from The Federal Karnataka and The Federal Andhra Pradesh)