India plans a $3 billion aluminum smelter complex in Iran, now that nuclear negotiations between Tehran and the P5+1 countries have concluded, media reports say.

The idea was mooted in 2014 but India has been cooling its heels for the removal of sanctions on Iran to go ahead with the plan.

India’s National Aluminium Co. is now seriously considering to implement the project after Iran and the P5+1 finalized their negotiations on Tuesday.

The plan includes the construction of a smelter to produce 500,000 metric tons of aluminum per year and a 1,000-megawatt captive power plant.

India’s coal stock is not sufficient to power its aluminum production and since imports of coal are not viable, the country has to look for reserves and build a plant abroad.

Iran is using a mix of sources for power generation, including hydroelectric stations, oil products and natural gas.

With a lingering drought having drained dams and oil products polluting the environment, the country is switching to gas-powered electricity. Last year, Iran fed 50 billion cubic meters of gas into its power plants, up from 36 billion cubic meters a year before.

The country is viewed an ideal destination for aluminum production because of its power generation capacities, given that electricity accounts for 40% of smelting costs.

Iran itself produces about 340,000 metric tons of aluminum per year and plans to raise it to 1.5 million tons by 2025 with an investment of about $12 billion.

Hormozgan Aluminium Co. in the Iranian city of Bandar Abbas.

Its biggest aluminum manufacturer, the Iranian Aluminum Company (Iralco), is based in the central city of Arak and listed on the Tehran Stock Exchange.

Bid for business

Other Indian companies are reportedly scouting for business opportunities in Iran. Multinational conglomerate Larsen & Toubro is said to be angling for oil and gas projects while Tata Power is looking for power schemes and Adani Enterprises eyeing port investments.

India signed an MoU in May for the development of Chabahar Port in southeast Iran. A commercial accord is still needed to implement the pact. New Delhi says it will use terminals in the port to operate container and multi-purpose cargo ships.

Last month, the second English-language Indian daily, the Hindu, said New Delhi had begun “resetting” ties with Tehran to pave its way for entry into Afghanistan and the Central Asia.