Sinosteel Corp, a Chinese mineral trading company, plans to build a 4 billion U.S. dollars steel plant in India.

It will join other global steel majors in tapping the fifth-biggest iron ore reserves in the world, Bloomberg News reported.

The company will invest US$500 million initially in the planned five-million-metric-ton plant in eastern Jharkhand Province, Sinosteel's India Managing Director Wang Hongsen said in a telephone interview from New Delhi yesterday.

The total investment will be made over eight years.

Sinosteel joins Arcelor Mittal, the world's biggest steel company, and South Korea's Posco in announcing plans to build mills in India even amid delays in allocating land and mining permits because economic growth of 9 percent is stoking demand for the metal.

Mittal has said steel consumption in Asia is growing faster than in Europe and North America.

"Foreign companies investing in India are willing to put up with some delays as the long-term benefits of such investments will far outweigh such irritants," said Dipak Acharya, who manages the equivalent of 19 million dollars in stocks at BOB Asset Management in Mumbai.

Steel usage in India is forecast to rise 7.7 percent a year from 2010 to 2015, almost twice the 4.2 percent global rate in the same period, according to the International Iron & Steel Institute.

Arcelor Mittal Chief Executive Officer Lakshmi Mittal said on March 25 progress was slow in the company's proposed Indian ventures. Mittal agreed to build a 9 billion dollars plant in Orissa, Malay Mukherjee, a member of the group management board, said on December 21. In October 2005, Mittal announced a 9 billion dollars, 10-million-ton-a year plant in Jharkhand State.

Posco, the world's fourth-biggest steel maker, has yet to get the land it needs for a 12 billion dollars plant in Orissa following opposition from some political parties and farmers' groups. Construction work was to begin last month.

Sinosteel is in talks with the government of the Jharkhand State in eastern India to work on details of the plant and may sign an initial accord next month, Wang said. Sinosteel expects to receive rights to mine as much as 300 million tons of iron ore for the proposed plant.