The two top PSUs under the steel ministry - SAIL and NMDC - will enter into an agreement on Monday to mine Arki Limestone Mine in Himachal Pradesh, the home state of Steel Minister, Mr Virbhadra Singh.

"The MoU between NMDC and SAIL for setting up of a joint venture for development of Arki Limestone Mine, Solan, in Himachal Pradesh will be signed in the presence of Steel Minister Mr Virbhadra Singh (on Monday)," an official statement said here today.

The JV company will invest over Rs 200 crore for developing the mines, which has an estimated reserves in excess of 200 million tonnes, a top steel ministry official said.

The actual mining of limestone from the reserves is expected to be started only in the next 2-3 years, he added.

"The joint venture company will at present conduct the feasibility study and prepare a detailed project report (DPR)," he added. The Arki limestone is steel-grade limestone used in the process of making steel.

"The JV company will get a ready consumer in...SAIL for supplying the limestone lumps, while NMDC will supply fines to cement companies," another official said.

SAIL is undertaking Rs 70,000 crore expansion project to take its annual steel production capacity to about 23 million tonnes from about 14 million tonnes at present and would be a ready consumer of limestone lumps.