Russia’s Severstal and India’s National Mineral Development Corporation (NMDC) plan to build an integrated steel plant together.

The pair have signed a Memorandum of Understanding (MOU) to establish a Joint Venture company and construct the plant.

The JVC proposes to have its captive coking coal mining subsidiary in Russia and iron ore mining subsidiary in India to ensure long term supply of the critical steelmaking raw materials to the plant. The plant will be constructed in Karnataka, will have a capacity between 2 and 5Mt/y.

NMDC and Severstal will each have a 50% shareholding in the Joint Venture and will appoint thesenior management team. NMDC is a Navratna Public Sector Undertaking under the Government of India.

Severstal is an integrated steel and mining company. In 2009, it produced 16.7Mt of steel. Revenues were $13.05bn and EBITA was $844M.