In a significant development, Tata Steel on Thursday said it had signed a licensing agreement with mining major Rio Tinto for commercial development of environment-friendly direct iron smelting process called HIsarna.
“The agreement covers how both parties will work together, sharing their existing knowledge of the two technologies that are combined in the new process,’’ it said in a statement.
The HIsarna iron-making process consists of cyclone pre-reduction technology (CCF), owned by Tata Steel and bath smelting technology (HIsmelt), owned by Rio Tinto. “This combination offers excellent opportunities for the collection and geological storage of carbon-dioxide, ability to utilise lower-cost raw material feeds and the prospect of energy savings through the elimination of stages in the iron-making process,’’ the statement added.
Funded jointly by the consortium of European steelmakers’ ULCOS, the European Commission and the Dutch Economic Affairs Ministry, a HIsarna pilot plant is being commissioned at Tata Steel’s IJmuiden steelworks in the Netherlands. The six lakh tonne per annum plant is intended to allow the two constituent technologies to be tested in combination.
In a related development, Tata Steel said it will sell its 51 per cent stake in group company Tata Refractories to Nippon Steel’s associate Krosaki Harima Corporation (KHC) for Rs. 576.3 crore and induct the Japanese firm as a strategic partner. “Under this arrangement, KHC will acquire 51 per cent equity stake out of Tata Steel’s current 77.46 per cent stake in Tata Refractories (TRL),” the statement said.
Both the companies have entered into definite agreements for the deal, it added. Tata Steel would continue to hold 26.46 per cent stake in the TRL -- the largest domestic refractories manufacturer.
Tata Refractories (TRL) has been valued at approximately Rs. 1,130 crore, the statement said. Going by the valuation, Tata Steel would get Rs. 576.3 crore by selling 51 per cent stake in TRL.
“I am happy with this association with Krosaki Harima and I am sure this partnership will propel the business to greater heights in future,” Tata Steel Managing Director Hemant Nerurkar said.
