Mumbai, July 1: JSW Steel Ltd (formerly Jindal Vijayanagar Steel) is making a foray into non-ferrous metals. The Sajjan Jindal-led company is promoting a Rs 9000-crore alumina plant and aluminium smelter in Andhra Pradesh.

JSW Steel and Jindal South West Holding Ltd have signed a memorandum of understanding (MoU) to this effect with the government of Andhra Pradesh.

The group was represented by JSW Steel vice-chairman and managing director Sajjan Jindal and joint managing director and CEO Raman Madhok.

Under the agreement, JSW Steel, part of the OP Jindal group, will incorporate and promote an alumina plant and an aluminium smelter to produce about 2.5 lakh tonnes of aluminium per annum initially, with a provision for suitable expansion.

Work on the project, which will come up near Vishakhapatnam, is expected to start in six months.

Sources said the project will be funded through internal accruals with both investment and manufacturing companies contributing. A public offering could also be made, they added.

Andhra Pradesh chief minister Y. S. Rajasekhara Reddy has urged the company to train local tribals in mining and allied subjects for the proposed project and ultimately absorb them in the industry as far as possible.

The state government is considering exemptions of octroi/entry tax for the project. It is also extending other tax incentives and exemptions to the project.

Around 10,000 people will be employed directly or indirectly after the completion of the project.

Andhra Pradesh Mining Development Corporation will supply bauxite from Araku (Galikonda, Raktakonda and Chiittamgondi) and Sapparla groups, containing approximately 240 million tonnes of bauxite ore, exclusively to the company at a government-fixed price.

“Jindal South West or its subsidiary will get forest and environmental clearance on a priority basis,” a state government statement said.

The company will also offer equity to Andhra Pradesh Mining Development Corporation.