State owned Indian company Nalco's plan to set up a 310kt/y aluminium smelter and a 750MW power plant in Iran continues to languish.

"The geo-political situation in Iran is not favourable, due to which we have not been able to proceed with the financial closure for the project," said B L Bagra, acting chairman and managing director, and director (finance).

The project was announced in 2007 and Nalco had planned to ship bauxite from its Indian mines to Iran and convert it into aluminium. It had signed a memorandum of understanding with Iran's Kerman Development Organisation, but an agreement to form a joint venture has not been floated yet.

In the meantime, Nalco had held talks with various financial companies, including the Islamic Bank of Indonesia, which had shown interest in financing the project. The talks, however, did not succeed.

"The project is on hold," said Bagra, not giving any timeline for a possible take-off.