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Monday, November 13, 2006

Tatas Steel to invest Rs 2500 cr in Tuticorin

Tata Steel will be investing Rs 2,500 crore in its titanium dioxide project in Tamil Nadu.The company has completed the feasibility study and is likely to start production in the first quarter of 2009.

Sources said the size of the project would be 5 lakh tonne of ilmenite (iron titanium oxide from which titanium dioxide is extracted).

The new business will generate significant revenues for the company as titanium dioxide pigment in India is selling at Rs 1-1.2 lakh per tonne.

Tata Steel will have a technology partner for the project and can even explore the possibilities beyond just a technical partnership. “We will need a partner, if only someone want to come on board,” said the sources.

The feasibility study was conducted with a consortium of partners comprising Outokumpu Finland’s physical separation division based in the US, Outokumpu-Lurgi,Germany, Pincock Allen and Holt, US, a resource and mining consulting company, and L&T.

The company was granted prospecting license over 80 sq km area in Tamil Nadu in Tirunelveli and Tutitcorin districts. Tata Steel was supported by MN Dasturco and TZMI, Australia-based marketing and process consultants. The study was designed to be carried out in two parts, the geological resources evaluation and the mineral separation, validation and optimisation of flow sheets.

The sources said the feasibility study had shown that there was not enough water and the company have to set up a sea water desalination plant.

The construction time for the project will be 18-24 months. The project will be in phases with the first one involving mining, mineral separation and value addition.

The final phase will see production of titanium dioxide or pigment, a key ingredient for the paints industry, among others.

However, the project is running 6-7 months behind schedule due to delay in possession of the land. The target was to start the project in the middle of 2008.

Tata Steel requires 5,000 acres of land for the project, which will come up near Tuticorin. The company signed a memorandum of understanding (MoU) with the Tamil Nadu government in the middle of 2002.

Source: Business - Standard

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