Tata Steel plans Rs 2,500cr unit in Tamil Nadu

Leading steel maker Tata Steel on Thursday signed a memorandum of understanding with Tamil Nadu government to set up an integrated titanium dioxide manufacturing facility in Tuticorin district of Tamil Nadu at an investment of Rs 2,500 crore.

The MoU was signed today at the secretariat in the presence of Tamil Nadu chief minister M Karunanidhi and Tata Group chairman Ratan Tata, among others.

The project envisages mining and mineral separation, followed by value addition to Synthetic Rutile and titanium dioxide or pigment, a key ingredient for the paints industry, among others. The project will be implemeneted over a period of six years. The company will also establish a sea water desalination plant and a power plant for this project.

It may be recalled that Tata Steel had signed an MoU with the Tamil Nadu government in 2002 to undertake a techno-economic feasibility study for setting up this titanium project using the mineral sands available in southern districts -- Tirunelveli and Tuticoin -- of Tamil Nadu.

While the company had completed the feasibility study with the help of consortium of partners, land acquisition process was a major cause for the delay in finalising the plans, according to sources close to the development.

Talking to reporters, B Muthuraman, MD, Tata Steel, said land acquisition is an issue everywhere. After signing of the MoU in 2002 for the titanium project nothing much happened. The present state government has given us the confidence to implement the project well.

The state government has agreed to extend all help and assured us to procure lands for the project, which will require 10,000-12,000 acres. llmenite despoits are located on the surface of the land and hence we require large acres of land, he added.

The project expected to generate employment opportunities directly for 1,000 people and indirectly for 3,000 people. The company plans to create this as a hoslitic project which will include programmes for skill development for families near the mines, community development and reclamation of lands after mining for cultivation of commercial crops, among others.

"The project will contribute well to the industrial economic development of southern Tamil Nadu and further impetus to other infrastructure projects in the region," Shaktikanta Das, secretary - industries, Tamil Nadu government, said.

According to information available on company's website, the company was granted prospecting licence over 80 sq km area by government of Tamil Nadu in the districts of Tirunelveli and Tuticorin with due approval from government of India. The project is preparing for a production of 5 lakh tonne of ilmenite (iron titanium oxide from which titanium dioxide is extracted) per annum initially, which will be enhanced to 10 lakh tonne later.

Muthuraman said the manufacturing unit would have capacity to manufacture upto 100,000 tonne of titanium oxide per annum. This project is likely to generate significant revenues for the company as India presently imports 60,000-70,000 tonne of titanium dioxide every year. The consumption is expected to go up in tune with the economic growth.

The production is expected to commence some time in the middle of 2008, according to information on the website.

Ratan Tata, chairman, Tata Group said it is a very significant project for Tatas in Tamil Nadu. "We have assured that we will also look at investments in power and a few other sectors in Tamil Nadu, but this is a very significant first step in Tata Group's investments in Tamil Nadu, he added.