Mumbai: Reliance Anil Dhirubhai Ambani Group (R-ADAG) has proposed to set up a 12-million-tonne steel plant in Jharkhand, official sources said today.

''They have approached us to set up a 12 MTPA steel project. We have their proposal, the process is on,'' K K Khandelwal, industry secretary of the Jharkhand government, said.

The greenfield project, proposed to be set up by the Reliance ADA group company Reliance Infrastructure, will involve investment of around Rs40,000 crore, sources close to the development said.

''The proposal has been sent to Mecon Ltd for further study," Khandelwal said, adding the Jharkhand government and Reliance Infrastructure will sign a memorandum of understanding once the proposal is cleared.

It may be noted that the world's largest steel producer, ArcelorMittal, is also finalising plans to set up an integrated steel plant of the same capacity in the state.

Reliance Infrastructure Limited, earlier Reliance Energy Limited, a part of Reliance - Anil Dhirubhai Ambani Group, undertakes EPC services in Indian power sector.

Reliance Infrastructure is eyeing engineering, procurement and construction (EPC) projects worth Rs15,000 crore from steel PSUs in the next 2-3 years and is reported to be in talks with companies like SAIL and NMDC.

The company sees projects worth around Rs50,000 crore from steel PSUs coming in the next 2-3 years and hopes to grab about 30 per cent of these projects.

Under an EPC contract, a company undertakes to build projects of another entity but has no right over the asset.