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Essar Global, the overseas investment arm of the Essar group, on Tuesday signed a memorandum of understanding with Qatar Steel Company to build a 4 million tonne steel plant.
The plant will be set up at Mesaieed Industrial City in Qatar at an estimated cost of $1.25 billion (approximately Rs 5,500 crore).
According to the agreement, Essar will provide high-grade iron ore pellets, the technology for manufacturing steel and professional management to set up and manage the plant.
Essar Constructions Ltd, a part of the Essar group, will be the turnkey contractor for the project. Other details, including the shareholding pattern for the company set up to execute the project, were not available. The plant is expected to come online in the first half of 2008.
Ravi Ruia, vice-chairman of Essar Global, said: "Qatar is seen as the ideal platform to launch industrial projects that need large amounts of energy, either as feedstock or as fuel, as Qatar has the third largest natural gas reserves in the world. This joint venture is expected to create new avenues of co-operation between India and Qatar."
Ruia and Sh Nasser Bin Hamad Al Thani, director and general manager of Qatar Steel, signed the MoU.
"Qatar is emerging as a prominent player on the international steel map. The demand for our products is rising at a rapid pace. The expansion plans that we have in place reflect our commitment to satisfying the growing demand for Qatar Steel in various markets around the world," said Sh Nasser Bin Hamed Al Thani.
Our reputation for high quality steel is undisputed and we are determined to create new benchmarks in steel quality", said Sh Nasser Bin Hamed Al Thani.
The Mumbai-based Essar group has interests in steel, shipping, power, oil and gas, construction and telecommunications. It has an asset base of over $ 4.4 billion. Essar Steel, the group's steel company, has production facilities in India and Indonesia.