Tata Steel will invest Rs 600 cr in Oman JV

Tata Steel will invest around Rs 600 crore in a joint venture with the Al Bahja group, a leading business house of Oman, for development of the Uyun limestone deposits at Salalah in the Sultanate of Oman.

Speaking on the sidelines of the 2nd Asian Mining Congress, B Muthuraman, managing director, Tata Steel, said that 10 million tonnes of limestone would be developed and the investment would be spread over three years. The limestone deposits would cater to Tata Steel's facilities in India and the UK under Corus.

IN THE LIMELIGHT

The limestone deposits would cater to Tata Steel's facilities in India and the UK

Tata Steel will pick up 70 per cent stake in the existing company, Al Rimal Mining, through its subsidiary TS Global Minerals Holdings

The Indian company has set a target of 50-60 per cent raw material security over the next 3-4 years

Muthuraman said though the investments were not that big, they would go a long way in making Tata Steel competitive. He did not quantify the extent of savings to Tata Steel on account of captive limestone deposits.

Industry sources pointed out that there were no significant limestone deposits in India.

This is not Tata Steel's first limestone venture. In 2004, Tata Steel signed a shareholders' agreement with Unitstretch Limited, a member of the G Premjee Group of companies. and Sila Eastern Company was established, with Tata Steel holding a 49 per cent stake. The objective was to source limestone for Jamshedpur Works on a long-term basis.

Muthuraman said the quality of limestone in Oman was better and cheaper. According to the arrangement with the Al Bahja group, Tata Steel would be holding a 70 per cent stake in the existing company, Al Rimal Mining LLC through its subsidiary TS Global Minerals Holdings. Al Rimal Mining LLC would develop the Uyun Mine.

The move to forge the agreement with the Al Bahja Group was part of Tata Steel's initiative to secure raw material security.