KOLKATA: The Tata Group is planning to make South Africa the hub for its minerals and metals business, company sources said, adding that besides being blessed with natural resources, South Africa was set to become an economic power house and a factor in the region's economic development.

The Tatas have identified South Africa as a strategic destination for the minerals and ferro alloys business and the board approval of the ferrochrome project in South Africa was in tune with this "strategic intent ". Indications are that Tata Steel is planning to invest in coal and manganese mines in that country. This was also mentioned by the South African Deputy President, Phumzile Mlambo-Ngcuka, while speaking at the ground-breaking ceremony of Tata Steel KZN (Pty) Ltd., the ferrochrome plant of Tata Steel in South Africa, on Monday, according to the company. Ferrochrome is used in the manufacture of stainless steel and the end-product will be exported to Asia, Europe and the U.S., according to Tata Steel Managing Director, B. Muthuraman.

The 1.35 lakh tonnes capacity plant will be commissioned in October 2007 and will export its entire output. While this first phase will cost about Rs. 435 crore, a decision on doubling the capacity will be taken by October 2008, says a company release. The Richards Bay location was chosen by Tata Steel because it was the largest and most efficient port in South Africa, said Tata Group Chairman, Ratan Tata.

However, it was the low power cost and the skilled technological base of South Africa that swung the decision in its favour over Australia.

The plant would use chrome ore and chrome concentrate produced in India and lumpy ore from Iran.

The raw material would be converted in to ferrochrome, the release said.

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