Stainless steel maker Varun Industries said it will build a heavy minerals processing plant in Madagascar at an estimated cost of INR 300 crore and sell the entire output to a public sector company, under Department of Atomic Energy.

The company, which recently discovered huge reserves of heavy minerals, including rare earth elements, plans to produce 500,000 tonnes of heavy mineral concentrates in Madagascar per year.

A company statement said that "As per the agreement, the PSU under Department of Atomic Energy, will purchase entire mineral concentrate from Varun Mines to ensure suitability of the constituent minerals for its local operations.”

A company spokesperson, Mr Rahul Jain added that the heavy minerals processing plant will be ready in 7 to 8 months and supplies to the Atomic Energy Department's PSU will begin by March 2012. He however, refused to disclose the name of the government company, citing strategic reasons.

Earlier this month, the company had announced discovery of heavy mineral resources, including rare earth, in Anosy region of Madagascar.

Total Heavy Mineral reserves in these permit areas are estimated at about 266.8 million tonnes and can be extracted for 40 years.

(Sourced from ET)