China’s second-largest steelmaker, Anshan Group has scrapped a plan to build a steelworks in India because of uncertainties in resource allocations. It is, however, continuing talks for a planned plant in the USA.

“We see some risks after careful study of the project” in India, Chen Ming, vice chairman of listed unit Angang Steel Co, said in Hong Kong. Talks had been held on an Indian steel project with an annual capacity of as much as 3Mt, Anshan said.

The project would require an investment of about $2bn and Anshan may also plan for a plant in an African country, the Financial Times reported, citing Anshan President Zhang Xiaogang. India’s steel ministry in November estimated the country’s steel demand to grow at 9%/y over the next five years.

Chen Ming continued, (the parent is) “still in talks for the US steel project and, so far, no progress has been made”.

In October 2010 Anshan took a 14% share in the proposed Steel Development Company, LLC, to be one of a series of micromills each to produce 350kt/y of bar products to serve a local market. The first was to be built in Amory, Mississippi, USA. The company is led by John Correnti, former Chief Executive Officer and President of the USA’s largest minimill group, Nucor and later former CEO of SteelCorr, a jv thin-slab minimill he established with Russia’s Severstal which was then taken over by the Russian company and the name changed to Columbus Steel.

At the time of the Amory venture, the US Senate objected strongly to a Chinese State owned company taking a stake in a US manufacturing company and eventually Anshan withdrew from the deal.

Anshan, based in Liaoning province, is facing hurdles in its global expansion effort as it grapples with overcapacity and a shortage of raw material at home.