Mining giant Rio Tinto said Monday it plans to invest $2 billion in an iron ore project in eastern India in what it said would be Australia's "largest investment" in the South Asian nation.
Sam Walsh, chief of the Australia-based company's global iron ore operations, said the project in the mineral-rich eastern state of Orissa would supply clients in India and abroad.
"This would be Australia's largest investment in India," Walsh told reporters after a meeting of Australian and Indian business leaders in New Delhi advising on ways to clinch a free trade deal between the two countries.
Walsh said he was unfazed by huge difficulties encountered by other metals companies in getting approval for projects in India that have rattled foreign investors eyeing the country.
"I am a very patient man," said Walsh. "We will go through all the (legal) processes. We are already working with the local community."
South Korean steel giant POSCO's plans, announced in 2005, to build a plant in Orissa, have yet to be implemented in the face of wide opposition from locals campaigning to save farmland and forests.
Steelmaker ArcelorMittal, controlled by Indian billionaire Lakshmi Mittal, has also been unable to acquire land for a proposed plant.
Industrialisation has been championed by India's government as a way to drive growth and pull millions out of poverty. But industrial projects have often created battlegrounds between local groups and companies.
"We would bring our environment and safety systems and obviously we would use local people," Walsh said.
Walsh downplayed investor worries that Rio Tinto could face a global market iron ore glut with the economies of emerging market giants China and India -- both large minerals consumers -- slowing.
"Our low-cost operations combined with our proximate distance from China and the Asian market gives us a significant advantage," he said.
Australian trucking billionaire Lindsay Fox, who was at the same news conference, said the advantages of liberalising trade between India and Australia were "obvious".
"We have got tremendous opportunities together," he said. "But like the courtship of a man and woman -- we have to get know one another before going the journey of life," Fox said.
India and Australia launched talks last year on a free trade deal that would broaden the base of merchandise trade and remove barriers to services trade.
Bilateral trade between the two countries has been growing by 20 percent a year for the past five years to Aus$23 billion ($24.6 billion), an Australian government statement said.
The two countries aim to double trade to Aus$40 billion in the coming five years.