Indian iron ore giant NMDC Ltd. hopes to sign a joint venture pact with Russia's OAO Severstal by December to set up a steel plant in southern India's Karnataka state.

Mr Rana Som CMD of NMDC said “By December, we will sign a joint venture agreement with Severstal of Russia to set up a 3 million tonne per annum steel unit. It will be a 50:50 joint venture.”

He also said that NMDC is now looking to increase the capacity of the proposed JV mill to 3 million tonnes a year from 2 million tonnes planned when the initial pact was signed in December 2010.

He said “Our initial study shows that a bigger size plant will be more viable.”

Mr. Som also said that NMDC and Severstal will have equal stakes in the joint venture and will appoint a senior management team soon for the project.

He said that the partners are finalizing the product mix of the proposed mill.

NMDC's foray into the steel sector is part of its diversification to capitalize on growing demand of steel in India and it is setting up another 3 million tonne plant in eastern Chhattisgarh state.

(Sourced from BL & WSJ)