Mumbai: Vedanta Resources Ltd, the London-based holding company of Sterlite group, yesterday announced plans to invest Rs7,000 crore in India to set up a five-lakh-tonne-per-annum greenfield aluminium smelter in Orissa. The project also includes a 1,000-mw power plant.

Vedanta, which raised $825 million last year through a London Stock Exchange listing, is currently setting up a 1.4-million tonne per annum alumina refinery in Orissa.

Anil Agarwal, founder and CEO of Vedanta, said: "This is a major step in our vision to create 1mt. of aluminium capacity to meet the growing demand and establish India as a major player in the global resource industry."

The group has sufficient resources to fund this project, although the debt-equity ratio would be 40:60, officials said.

"We have brought in foreign direct investment of $1.5 billion to fund our existing projects. The success of these projects will attract international investors to India''s metals and mining industry," Agarwal said.

"The company''s ongoing expansion projects of Rs10,000 crore are fast approaching completion as scheduled. After taking over the state-owned Hindustan Zinc Ltd, its cost of production declined to $560 per tonne from $800 per tonne," he said.

The new aluminium smelter project in Orissa marks the beginning of the next phase of Vedanta''s strategy in the aluminium sector, as the project would be implemented in two phases over the next 3-5 years.