Mumbai: Tata Steel has signed a memorandum of understanding (MoU) with Vietnam Steel Corporation (VSC) to jointly build a 4.5 million tonne steel plant in Ha Tinh province in Vietnam.

Tata Steel managing director B Muthuraman and VSC president Tau Van Hung signed the MoU in Hanoi.

Tata Steel, the world''s sixth largest steel maker, would hold 65 per cent stake in the joint venture and the remaining would be owned by VSC. The proposed plant will be build over a period of 10 years.

The MoU will enable Tata Steel to extend an equity contribution of 30 per cent in Thach Khe iron ore mining project. The compay also expects to have a 30 per cent stake in Thach Khe iron ore joint stock company, which would undertake mining in due course of time.

Financial closure for the project would be achieved once the study completes.

Tata Steel already has a joint venture with VSC in rolling mills through Singapore-based Natsteel and the company believes that the proposed project will have significant economic impact in terms of optimisation of local resources, development of technology and earning foreign exchange.

Vietnam has a GDP growth of 8 per cent and its current per capita steel consumption is over 85 kg.