ArcelorMittal on Wednesday turned down an offer to consider Karnataka as an alternative site to set up its steel plants as it is facing land acquisition problems in mineral-rich Orissa and Jharkhand.

“We are not looking at any other option at the moment,’’ Vijay Kumar Bhatnagar, ArcelorMittal’s executive vice-president in charge of India and China operations, told Financial Chronicle, declining to comment on the offer of alternative site in Karnataka.

He, however, said that the company was keeping all options open.

Earlier, minister of state for steel, Sai Prathap Annayyagari, offered ArcelorMittal Karnataka as an alternative site should land acquisition issues continue to hamper their investment plans in Orissa and Jharkhand.

“I can only say that Karnataka would be most keen to host the world’s largest steel company, if there are problems elsewhere in the country. It is a very sound destination for global investors,’’ the minister told reporters on Wednesday.

Bhatnagar said his company had lined up Rs 1 lakh crore investments in India, adding that they wanted a chunk of the Chiria mines in Jharkhand. The mines with 2 billion tonnes of high-grade iron ore reserves is being coveted by Tata Steel and JSW Steel, all of whom want mining rights there.

Last week, chief financial officer of ArcelorMittal, Aditya Mittal, had said through a conference call that the company was looking for alternative sites. “We are in talks with the state governments (of Jha-rkhand and Orissa) and looking at alternative sites elsewhere in the country.’’

At a steel summit organised by the CII in the capital, dominated by land acquisition and other procedural and logistical issues, Annayyagiri said that as the Indian economy was looking up, the country’s steel industry was also perking up. During the past five years, growth in demand for steel has averaged to around 10 per cent. The surge in this demand would continue over the next decade or two. To meet it, steel sector has to double its production in the next five years, that is, around 200 million tonnes (mt) by 2020.

Conceding that India’s per head steel consumption of 47 kg was small as compared to the world average of 190 kg, he said that the gap could be bridged if forward linkages of steel were aimed at tapping the rural demand.

Speakers from the ind-ustry and government stressed on ways and means to remove infrastructural and logistical bottlenecks. Atul Chat-urvedi, who took over as steel secretary on Tuesday, said that environmental clearances and non-availability of land were two issues that needed to be tackled on a priority basis.

SAIL chairman S K Roongta highlighted four areas of challenge for the industry. These, he said, included technology and process, availability of skilled manpower, policy support and the resettlement and rehabilitation (R&R) policy.

Earlier in his welcome note, B Muthuraman, chairman of the CII national committee on steel and vice-chairman of Tata Steel, said that though India is on a growth path, it faces many challenges like achieving sustainable growth. “For the Indian steel industry to grow and prosper, there are major challenges. There will be a strain on infrastructural and natural resources like land, water, power, railways, roads, iron ore and coal. The government needs to step in many of these areas like earmarking large tracts of land as well as formulate policies to allocate iron ore and coal resources to all steel plants,” he added.

On price reduction of steel on Wednesday, most industry leaders said that it had been prompted by global conditions.

“We have cut prices of our flat steel products. It is in the same range as other steel makers have done,” Tata Steel managing director H M Nerurkar told Financial Chronicle.

SAIL, JSW Steel, Essar and Ispat had cut prices by about Rs 1,500 per tonne on Tuesday.