Mumbai: China's state-owned Sinosteel Corporation is in talks for setting up a $200-million integrated iron ore and steel project in India and is planning to raise $500 million by listing its mining assets overseas, company sources said.

Sinosteel and partners could spend at least $200 million on an integrated iron ore and steel project in India, company president Huang Tianwen said.

"India needs steel for infrastructure, ports, roads, railways, etc. They are 10-15 years behind China," he said.

Potential members of the consortium, which could include Chinese steel giant Baosteel Group, are in talks to build a greenfield steel plant with capacity for 3- to 5-million tonnes a year of long products, including construction steel, Huang said.

He said the consortium is looking at several locations for the project, including Orissa state.

Local interests had blocked Chinese investments in Indian iron ore mines, Huang said. Because of Indian restrictions on exporting high-grade iron ore, the Chinese firms are now pursuing a combined steel and ore investment, he added.

"The success of the talks depends on the attitude of the Indian government," Huang said, adding that, for the moment there is no bar on iron ore exports. India's steel industry cannot use all the country's iron ore and the government is not likely to bar all iron ore exports, he pointed out.

The company, meanwhile, plans to list its assets, including those in South Africa, Australia and China, in the second half of 2007, probably in Hong Kong, its chief accountant Liu Andong told reporters in Beijing.

Sinosteel is in talks with UBS, Goldman Sachs, Morgan Stanley and China International Capital Corporation as potential underwriters. Liu said that over the next three to five years, Sinosteel intends to reorganise into five business units and list each of them.