National Mineral Development Corporation Limited, the largest iron ore producer by volume in India, would invest Rs.17,000 crore to set up steel plants in the country, its top official said in Bangalore on Friday.

"We are looking at diversifying into steel making and power generation in a big way and will invest Rs 17,000 crore for establishing steel plants in the country", C Hanumanth Rao Joint General Manager (commercial), NMDC told reporters here.

Announcing NMDC Limited's FPO (Further Public Offer) which opens on March 10, he said "we plan to set up two steel plants with an annual capacity of 3 million tonnes each in Nagarnath in Madhya Pradesh and Karnataka in three years."

As part of horizontal expansion, NMDC Ltd would also set up a pellet plant in Donimalai (Karnataka) and Chhattisgarh, Rao said.

The navaratna PSU, with total iron reserves of 1,212.7 million tonnes as on January 1,2010, would expand annual production capacity from 30 million tonnes to 50 million tonnes by 2015.

NMDC is looking at developing three new mines, two in Chhattisgarh and one in Karnataka of an annual capacity of 7 million tonnes each, he said.