India`s Bharat Aluminium Co. has signed memorandum of understanding with the state of Chhattisgarh for a new 650,000 t aluminium smelter.

The new unit to be set up in the state`s Korba town will cost 81 billion rupees (US$2 billion), Balco said in a statement.

On completion this will become the largest single location aluminium plant in this part of the world with a combined capacity of 1.0 Mt,” the statement said.

London-listed Vedanta has aluminium, zinc, copper, silver and lead operations in India, Australia and Zambia.

“We aim to become the lowest-cost producer of aluminium in the whole world,” the statement quoted Anil Agarwal, chairman of Vedanta as saying.

The statement did not give a timeframe for the completion of the project.