BlueScope Steel said a planned venture with Tata Steel might spend $250 million on a metallic coating plant in India.

Talks with India's second-largest steel maker that began last December may be concluded either by the end of this year or in early 2006, said Mike Courtnall, president of Asian building and manufacturing markets at BlueScope Steel in Melbourne.

India's economic expansion is fuelling construction and stoking demand for cars and domestic appliances, prompting its government to forecast steel demand will double in the coming 7 years. BlueScope said in December it would spend $100 million on three plants in India making pre-engineered buildings and related steel products.

"Sometimes a good long courtship will produce a good marriage," Mr Courtnall said yesterday in an interview. "Many of the products we produce will go in the developments that India will build, like factories and airports."

The metallic coating plant will probably be located at Jameshdpur in eastern India, Mr Courtnall said. BlueScope earlier said the three plants would be part of the venture if an agreement were in place. Tata Steel and BlueScope Steel will split the venture, which calls for total investments of $350 million, Mr Courtnall said. BlueScope is spending about $700 million to double its metallic coating capacity in Asia, Courtnall said.