Sinosteel Corp, a Chinese mineral trading company, plans to build a US$4 billion 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 5 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.

Delays in allocating land and mining permits have held up construction work on $21 billion projects announced in India by Arcelor Mittal and South Korea's Posco.

Meanwhile, steelmakers are not deterred by such delays as demand in Asia is growing faster than in Europe and North America. Steel usage in India is forecast to rise 7.7 per cent a year from 2010 to 2015, almost twice the 4.2 per cent global rate in the same period, according to the International Iron & Steel Institute.

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

Sinosteel may next month sign an accord for the project with the Jharkhand state government, Wang said. It expects to get rights to mine 300 million tonne of ore for 30 years. Sinosteel will sell as much as 70 per cent of its production in India