Bangalore: Two Chinese companies have teamed up with Indian partners to set up a plant that will produce iron ore pellets for India’s steel industry, the firms said in a statement received Thursday.
XIndia Steels brings together China’s Xinxing Group, China National Metal Products and India’s Sigma Minmet Limited, Kelachandra Group and Manasara Group for a total investment of $2.2 billion.
The five companies will set up the plant in Koppal district of southern India’s Karnataka state with an initial capacity to produce two million tonnes of iron that will be expanded to six million tonnes.
The three-phase venture will set up steel plants and iron-pipe making facilities after starting with production iron pellets.
The venture plans to take advantage of growing demand for steel in India as an economy that has expanded at an average 8.6% pace in the last four years spurs industries from automobiles to construction.
“This investment is in line with our strategy to be an active contributor to the emerging Indian steel industry,” said Liu Mingzhong , chairman, Xinxing Group, in the statement.
“Indian infrastructure has seen acceleration in growth in recent years, resulting from the investments that have taken place in all sectors of the Indian economy,” he said.
Xindia, an acronym formed by Xinxing and India, is held 45% by the Indian partners and 55% by the Chinese companies.
“The buoyant and vibrating Indian economy has presented investors with adequate resources and there is very high returns for investment in the steel industry,” said Gopi Ramanathan, director, Xindia.