NMDC, the country's largest iron ore producer, and Russian steel maker OJSC Severstal will jointly invest Rs 9,000 crore to set up a five-million-tonne steel plant in Bellary, Karnataka.

The development happened during the bilateral meeting between the Commerce and Industry Minister, Mr Anand Sharma, and the Minister of Economic Development of the Russian Federation, Ms Elvira Nebullina, at St Petersburg on Thursday, an official statement said on Thursday.

The plant will have an initial capacity of 2 million tonnes per annum expandable to 5 mtpa. Construction of the plant, to be spread over 2,800 acres, would start in 2012 and is to be completed within 36 months.

The two had signed an MoU last December for a 50:50 joint-venture. The joint venture would have its captive coking coal mining subsidiary in Russia and iron-ore mining subsidiary in India to ensure long-term supply of these raw materials.

Severstal will share its latest technology for the proposed plant, which will focus on producing superior grade steel used in sectors such as automobiles. Severstal, which is among the world's top 10 steel makers, operates steel plants in Russia, the US and Europe.

INDIA-RUSSIA CECA

Meanwhile, India and Russia expressed the political intent to ink a Comprehensive Economic Cooperation Agreement.

Both sides indicated that the dialogue will enable them to realise the potential of bilateral cooperation. Russia said it will first initiate consultation with their custom partners on the issue.

Mr Sharma said the cooperation can no longer be limited to purchase of defence equipment or investment in oil and gas, although these are highly valued by both countries. He said it must extend beyond Government-to-Government trade and investment, adding that the target is to achieve $20 billion in trade by 2015.

Mr Sharma also took up market access in Russia for Indian products such as agri products and pharma. The Minister said Indian firms can set up pharmaceutical production units in Russia but it would require suitable facilitation by Russia. Indian firms are also keen to collaborate in IT and telecom sectors, he said.

Both sides agreed to form working groups on IT, pharma, banking and finance modernisation, precision engineering and nano technology.

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