India's National Aluminium Co Ltd (Nalco) has announced that the company has signed a memorandum of understanding (MoU) with the Indonesian government to set up a 500,000 tonne smelter and a 1,250 megawatt captive power plant in Indonesia.

The state-owned company plans to invest around $3.4 billion in this greenfield project, to be built in two phases.

In the first phase, Nalco plans to build the smelter with an annual capacity of 250,000 tonnes and the coal-fired power plant with the capacity to generate 750 megawatts of electricity.

B.L. Bagra, Finance Director, Nalco told that the PSU will double the smelter capacity to 500,000 tonnes and add another 500 MW to the power plant in the second stage.

To support its activities, Nalco would also build a coal-fired power plant with a capacity of generating 3X250 MW, public utilities and employee’s housing complex on 1,000 hectares of land, he added.

Nalco is also exploring possibilities of setting up plants in Iran, Saudi Arabia and South Africa.

The stock of Nalco closed on Friday at Rs.461 on NSE, down by 4% compared with previous close of Rs. 478. It touched an intraday high of Rs. 489 and low of Rs. 455.