Iranian and Indian officials will reportedly meet next week to discuss plans for construction of an aluminum smelter and a captive power plant in Iran in a project worth about $2.6 billion. 

National Aluminum Co Ltd (NALCO)’s idea to set up the 1-million-tonne capacity facility is driven by power shortages in India given that electricity accounts for 40% of smelting costs.

NALCO’s new chairman and managing director, Tapan Kumar Chand, will meet Iran’s Ambassador to India Gholamreza Ansari in New Delhi next week to take things forward, the Economic Times reported.

Chand said his company would prefer a local partner who could supply cheap electricity to fire the smelter. For feedstock in the plant, NALCO will ship alumina from the Indian state of Odisha.

The company has been planning to build the smelter since 2014 but was dragging its feet because of sanctions on Iran.

Last month’s conclusion of nuclear talks has encouraged the Indian government and companies in the country to push for stepped-up trade with the Islamic Republic.

India’s state-owned KIOCL plans to import one million metric tons of iron ore from Gol Gohar Mining Company of Iran. The Mangalore-based company makes pellets from the imported ore and exports them to Iran.

KIOCL has already supplied 50,000 metric tons of high grade iron ore pellets to Iran and expects to sell 1-2 million tons more.

On Monday, Ambassador Ansari said Iran would welcome India's participation in various "big ticket projects" in diverse sectors.

Indian Oil Minister Dharmendra Pradhan plans to visit Tehran at the head of a delegation to win back development of a major gas field, which New Delhi lost by dawdling under US pressure.

India has signed a memorandum of understanding to develop Iran’s strategically-located Chabahar port but a commercial accord has yet to be inked in order to start the project.