The Hindu : Business : Tata Steel studying options of titanium project

Online edition of India's National Newspaper
Tuesday, Dec 14, 2004

Business

Business

Tata Steel studying options of titanium project

By K. T. Jagannathan

CHENNAI, DEC. 13. With the techno-economic study pointing to an overall feasibility for an integrated titanium dioxide facility in Tamil Nadu, Tata Iron and Steel Company Ltd. is at present analysing various options to set it up in a cost-effective way.

Water will form an important constituent of any option that Tata Steel decides. The way the water issue is addressed will also define the project profile. According to B.Muthuraman, Managing Director, Tata Steel has already initiated discussions with the State Government on various possibilities for sourcing the water needs of the proposed titanium dioxide project.

In an interaction with the visiting journalists at Jamshedpur recently, the Managing Director dropped enough hints to suggest that Tata Steel might have to adopt a composite approach if it were to make its dream for an integrated titanium dioxide facility in Tamil Nadu a reality. Given the current water situation in the State, he felt that the proposed project might need a desalination plant. However, he felt that a project with a desalination plant would have enormous cost implications. To address the cost concerns, a power plant along with the desalination plant would be in order, he said. Tata Steel would have to find out the right mode of putting up the desalination and power plants. Mr. Muthuraman said the water cost could be in the vicinity of Rs.60 per cubic metre with a desalination plant. With a power project along side, however, the water cost could come down drastically to Rs.20 per cubic metre.

Tata Steel, it may be recalled, had signed a memorandum of understanding (MoU) with the Tamil Nadu Government in 2002 to facilitate a techno-economic feasibility study with the available mineral sands on the beaches of southern districts to eventually set up an integrated titanium dioxide facility. Subject to technical and commercial viability, it had said then that it would put up an integrated titanium dioxide facility in two phases. According to the MoU, the first phase would involve mining mineral, beneficiation and manufacture of synthetic rutile, used in making electrodes. The final phase would see the setting up of a manufacturing facility for titanium dioxide. Titanium dioxide has utility in the paint industry. Mr. Muthuraman said that a one lakh tonne titanium dioxide project facility would cost Rs. 1,500-1,600 crores without the desalination and power plants.

Foray into construction

Tata Steel is gearing to make a big splurge into downstream products. It is proposing to set up a 50:50 joint venture. At least one the three units it is proposing to establish through the joint venture will come up near Chennai. According to Mr. Muthuraman, the planned unit in Chennai will come up on an acquired site. A defunct steel rolling company owns the land currently. The Managing Director said BlueScope Steel of Australia had been talking with Tata Steel for jointly entering the business. The details of Tata Steel's foray into the construction solution business were still being worked, he added.

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