Mittal Steel, the world's largest steelmaker, said it's spending $1.5 billion this year on plant expansions and other projects designed to tap a surge in demand.

The spending is part of $4.5 billion earmarked by the Rotterdam-based company for 900 projects in 14 countries, it said. The company expects global demand for steel to grow between 3 and 4 per cent in coming years.

“The basic fundamentals for our industry are more positive than they have been for many decades,'' billionaire owner Lakshmi Mittal said in a newsletter on the Web site. Demand will grow “for the foreseeable future.''

Mittal plans to raise production to an annual 100 million tons from 70 million tons in coming years partly through acquisitions. The industry is poised to narrow to three or four major global producers, with the top 10 accounting for at least 40 per cent of the market, Lakshmi Mittal said.

Mittal and Luxembourg-based Arcelor, the second-biggest steel producer, currently own less than 15 per cent of steelmaking capacity worldwide. By comparison, the three biggest iron ore miners, Vale do Rio Doce, Rio Tinto and BHP Billiton produce more than 50 per cent of supply.

Mittal Steel owns assets capable of producing about 7 percent of world capacity. In June, it completed an expansion to its Temirtau steelworks in Kazakhstan, raising capacity at the plant to 5.2 million tons a year, Mittal said.

A further expansion to Temirtau's coke oven will raise total capacity to 6.5 million tons a year in May next year, the newsletter said.

The company may build a smelter in India's iron-ore rich province of Jharkhand, Lakshmi Mittal said. India consumes 30 kilograms of steel per inhabitant, he said. China consumes 200 kilograms per person and Japan that consumes 700 kilograms.

“There is a strong possibility that India will continue to drive global steel demand growth in the future,'' he said. The company will almost triple capacity at its steelworks in Bosnia-Herzegovina to 2.2 million tons of capacity by the end of 2006, the newsletter said.

Mittal may also expand into production of ferroalloys - any of various alloys of iron or manganese and silicon - which are used as a raw material in the steelmaking process, according to Mittal Steel USA Chief Executive Lou Schorsch.