BUSINESS

Steel major plans huge outlay in Iran

EXPANDING HORIZON: The Managing Director of Tata Steel, B. Muthuraman, addressing a press conference in Mumbai on Monday. — Photo: Paul Noronha

EXPANDING HORIZON: The Managing Director of Tata Steel, B. Muthuraman, addressing a press conference in Mumbai on Monday. — Photo: Paul Noronha  

To partner with Iranian company in exploration and mining activities; billets to feed NatSteel project

Staff Correspondent

MUMBAI: Tata Steel has signed a joint venture agreement with Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) to join them in their proposed steel-making projects and mining operations in Iran.

The two companies will collaborate in the ongoing Hormozgan steel project, which would establish steel-making operations in the Persian Gulf Special Economic Zone (PGSEZ) at the port city of Bandar Abbas. The first phase of this project would establish a 1.5 million tonnes annually steel slab making facility that would be followed by the second phase to establish a similar capacity for steel billets.

In a separate venture, Tata Steel would partner with IMIDRO in the exploration and mining of unexplored iron ore mines at Gol-e-Gohar in Kerman province and would establish a gas based pellet plant there. Also, in a memorandum of understanding, Tata Steel expressed its intent to establish a separate three million tpa export oriented steel plant in two modules of 1.5 million tpa each at PGSEZ in Bandar Abbas near the Hormozgan steel plant.

Addressing the media here on Monday, B. Muthuraman, Managing Director, Tata Steel, said, "Tata Steel's investment in the Iranian operations over the next five years would be $700 million. The first joint venture is to be set up at a cost of $1,200 million with a debt-equity mix of 1:1. Our contribution, being a 49 per cent partner, would be around $300 million with the slab making facility being ready by April 2008.''

"While the output of the slabs project would be consumed by IMIDRO, Tata Steel would absorb the production of the billets project.'' In the billet project Tata Steel and IMIDRO would have 49 per cent stake each and the balance would be held by an Iran government-owned pension fund company. "The billets will feed our NatSteel project and will consume 85-90 per cent of the production. A small portion would be sold in the local market. For the NatSteel Electric Arc Furnace, we will slowly replace the high cost scrap with low cost billets,'' said Mr. Muthuraman.

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