Russia's largest steel maker Severstal and India's National Mineral Development Corporation (NMDC) will set up a joint venture to build a $2 billion steel plant in India, after signing a memorandum of understanding on Friday.
NMDC and Severstal will each have a 50 % stake in the joint venture and will jointly appoint the senior management team.
"The JVC (joint venture company) proposes to have its captive coking coal mining subsidiary in Russia and an iron ore mining subsidiary in India which will ensure a long-term supply of these critical steelmaking raw materials to the proposed steel plant. The plant which will be constructed in Karnataka will have a capacity of between 2 and 5 million tons per year," Severstal said.
The parties will create a working group, which will discuss investment levels, the range of products, and the plant's precise capacity as well as prepare an agreement to set up a joint venture.
"We believe that we will sign an agreement within three to five months, no later than in six months," Severstal General Director Alexei Mordashov said, adding that construction of the plant located in the north-west of India may start at the end of 2011.
NEW DELHI, December 10 (RIA Novosti)
