Tata Steel may buy ferro chrome units in S Africa

Tata Steel would be looking at acquiring ferro chrome units in South Africa. The company has already planned a 1.2 lakh tonne per annum ferro chrome project at Richard's Bay, South Africa.

Sources close to the development said, "Once Tata Steel's ferro chrome venture is underway, the company will be looking at acquiring existing units in South Africa. There are a lot of medium-sized units in South Africa which are available, however, the company has not yet short listed any of them." Tata Steel could be eyeing units with a capacity of around 5 lakh tonne per annum, they added.

Tata Steel is awaiting environmental clearances from the government of South Africa to commence production. The company has already been conducting technical trials at its site.

It is also learnt that Tata Steel may drop the idea of forming a joint venture with the Industrial Development Corporation (IDC) of South Africa for the project. IDC had initially approached the company to form a joint venture, where IDC would provide financial support.

Tata Steel has also lined up a capacity enhancement of the project to 2.4 lakh tonne in the second phase. "The capacity at the current site can be expanded to 2-3 lakh tonne. Therefore to strengthen the company's share in South Africa, Tata Steel will have to look at inorganic growth," sources said.

Sources further said the project, scheduled to be completed by March 2005, is likely to be delayed by a few months.

"Tata Steel has developed an indigenous technology which uses briquetteas instead of pellets. Although this has pushed back the project by a few months, it has brought down the project cost substantially," they said.

The project cost, earlier estimated around Rs 250-300 crore, had also scaled up to around Rs 450 crore owing to rising copper and aluminium costs. However, the new technology, will help the company set up the project at its original cost.