Russia’s OAO Severstal and India’s NMDC Ltd. have agreed to establish a joint venture company to build an integrated steel plant in India. The venture will have a captive coking coal mining subsidiary in Russia and iron ore mining subsidiary in India to ensure long-term supply of steelmaking raw materials to the proposed steel plant.

The plant will be constructed in Karnataka, India, and have an annual capacity between 2 million and 5 million tons. NMDC and Severstal will each hold a 50 percent share in the venture and will appoint the senior management team.

“The signing of this agreement is an important strategic development for Severstal as it will establish an integrated steel plant in one of the world’s most attractive growth markets,” says Alexey Mordashov, chief executive of OAO Severstal.