Mumbai: The Orissa government has allotted ArcelorMittal, the world's largest steel producer, 7,750 acres of land to build a steel project in the state. The company also secured a licence to build a steel mill in Egypt.

Arcelor Mittal India said it has got provisional approval from the Orissa government to acquire 7,750 acres of land to set up a 12-million-tonne steel plant and a township in the state.

"We will set up a plant on 6,000 acres of land while 1,000 acres would be used to set up a power plant. The township will be established over the remaining 750 acres," Arcelor Mittal India CEO Sanak Mishra said in Mumbai.

The state government has earmarked 6,000 acres for the 12-million tonnes steel plant and a further 1,000 acres for a 1,500-megawatt power plant, Mishra, said.

The company is also planning to set up a 1,500 MW coal-fired thermal power plant along with the project.

The company has already got a coal mine on lease with a total reserve of 650 million tonnes along with four other entities.

Mishra said the company is looking for additional land to rehabilitate people who might need to be relocated from the plant site.

ArcelorMittal also received a licence from the Industrial Development Authority (IDA) of Egypt's ministry of trade and industry to construct a steel plant in that country. The licence was auctioned in a competitive bidding process and ArcelorMittal's winning bid was approximately worth $60 million., Aditya Mittal, CFO and member of the ArcelorMittal group management board, said.

Under the terms of the licence, the plant will produce 1.6 million tonnes of steel using DRI technology, and 1.4 million tonnes of billets through the electric arc furnace route.

Construction of the plant, which will be located close to the northern Red Sea coast, is expected to start in 2009.

"We are pleased to have been successful in this auction. This forms part of our three-dimensional growth strategy to look for opportunities to expand our business in the three key areas of geography, product and value chain. The Middle East is a growth market for the steel industry and it makes sense for ArcelorMittal to expand its presence in the region," Aditya Mittal said.