Shimla, Nov 16 : India's public sector firms Steel Authority of India (SAIL) and iron ore producer NMDC Ltd (formerly National Mineral Development Corp) Monday signed an agreement to jointly develop a limestone mine in Himachal Pradesh.

"SAIL and NMDC Monday signed an MoU to jointly develop the limestone mine in the Arki region of Solan district in Himachal Pradesh. The MoU for the 50:50 joint venture was signed in New Delhi," SAIL said in a statement.

The Arki mine has deposits of about 100 million tonnes of quality limestone. The two companies will develop the mine to produce one million tonnes of lumps and two million tonnes of fine limestone annually.

While the low-silica limestone lumps will be used as flux for making steel, the fine limestone would be sold to cement companies.

Presently, SAIL does not have any captive source of low-silica limestone and meets its entire requirement of this vital input from the market.

With the proposed expansion of its production capacity in the next few years, its requirement of low-silica limestone is slated to go up to three million tonnes.

Himachal Pradesh allowed NMDC to extract limestone in the Arki region last year. This will be one of the biggest mining projects in the state with an investment of more than Rs. 5 billion.

The state government will get an annual royalty of Rs. 110 million and NMDC will generate direct and indirect employment for more than 5,000 people. (IANS)