Brussels: ArcelorMittal, the world's largest steelmaker, said on Monday it remained committed to building steel plants in India, but could abandon existing plans and look for a different site.
"We remain fully committed to India," a spokesman for the group said, though ArcelorMittal needed to keep its options in the country open.
The Financial Times reported on Monday that the group was close to pulling out of a $20 billion plan to build two large steel plants in Jharkand and Orissa.
The group's chairman, Lakshmi Mittal, told the paper in an interview that delays in persuading farmers and others to sell the land ArcelorMittal needed for the development were unacceptable and that it might look for other places in India for its expansion.
"This is just about building up a better bargaining position versus local authorities. The Mittals are committed to building business in India but they have trouble with land ownership," Commerzbank analyst Dirk Nettling said.
Another analyst also said the group was just flexing its muscles, hoping to secure ownership of the land swiftly.
"(Mittal) does want to do something in India. But it has been difficult to secure the land, just like it was for Tata," the analyst, who declined to be named, said.
Tata Motors Ltd had to move the factory for its low-cost Nano car out of West Bengal last year after violent protests by farmers who lost land forced it to stop construction.
ArcelorMittal shares gained as much as 2.6 percent to 24.35 euros on Monday after HSBC initiated coverage of the steel maker's shares with an "overweight" rating and a $46 price target.
At 1055 GMT they were trading up 1.75 percent while the DJ Stoxx European basic resources index was up 1.9 percent.
"We believe production will accelerate faster than expected," HSBC said in a note to clients.
SNS Securities initiated coverage of ArcelorMittal with a "buy" rating and a 33 euro target price, saying the share was undervalued.
"ArcelorMittal is the number one global steel manufacturer. But it is also a major miner with substantial iron ore reserves, which is not reflected in its current valuation," SNS said.
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