Jamshedpur, Dec. 2: The Essar group has promised chief minister Arjun Munda that it will set up a state-of-the-art steel unit in West Singhbhum district within two years.

Work on the 3 million tonne integrated steel plant is expected to kick off within six months.

Munda, accompanied by senior officials of Essar, visited the group?s steel plant at Hazira industrial area near Surat in Gujarat this afternoon. It is one of the most advanced steel plants in the country where the most modern technology is used to make the product.

?Essar has promised that the plant that they would set up in our state would be equally good as the one that exists in Hazira. That really is a sophisticated steel unit,? Munda told The Telegraph.

Essar?s steel plant in Jharkhand would be set up in the tribal-dominated and mineral-rich West Singhbhum district. ?Although the exact location is yet to be ascertained, it is most likely to come up between Manoharpur and Barabamboo,? Munda said.

The state government signed a memorandum of understanding for the plant last month. The MoU was signed between Hy-Grade Pellets Limited (HGPL) ? a joint venture of Essar Steel and UK-based Stemcore Minerals Limited ? and the state government on November 17.

?The group will invest over Rs 4,500 crore in the first phase to establish the steel plant. The company has assured me that the plant would come up within two years and that work would commence within six months after other nitty-gritty is taken care of,? Munda said.

In the second phase, the company has plans to set up a power plant near the steel unit. ?The power plant will supply electricity to its steel unit. If there is surplus power, it will sell it,? Munda said.

The chief minister said the quantum of investment to be made by the company is yet to be finalised. State government sources said the group was keen to work in West Singhbhum since iron ore is found in abundance in that district.

?Moreover transportation of raw material and finished products would not be a problem since Manoharpur is near the Howrah-Mumbai railway route,? sources said.

In return, Munda has assured the company all cooperation in establishing the facility.

Munda pointed out that once the unit was established, it would provide direct and indirect employment opportunities for local residents of the district.

Officials sources said after his trip to Hazira, Munda held a meeting with officials of Infrastructure Leasing and Financial Services (IL&FS) in Mumbai. ?They discussed at length ways and means to improve infrastructure in the state. The chief minister is keen to rope in IL&FS in a major way to boost infrastructure in the state. Another round of discussion will take place in mid-December,? the sources said.