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December 13, 2007 |
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TATA STEEL: Partners With SODEMI for US$1.5BB Iron Ore Project Tata Steel Limited and West African nation's state-owned SODEMI have entered into a joint venture agreement for the development of Mount Nimba Iron ore deposits in Ivory Coast (West Africa). Tata Steel will invest US$1 billion to US$2 billion to develop the iron ore mine, Peter Murphy writes for Reuters. Debarati Roy of Bloomberg News says the steel maker will spend US$1.5 for the development. The project will be implemented by a joint venture company, where Tata Steel will have a major shareholding. According to media reports, Tata will own 75% of the project, while the rest of the holding will go to SODEMI. According to the Indian firm, the iron ore from the project will be supplied to Tata Steel Group facilities especially those located in the United Kingdom and Netherlands. The Mt. Nimba deposit, spread over three countries -- Liberia, Guinea and Ivory Coast -- is one of the biggest in the West Africa. Supplies from the project will help lower costs at Tata's mills in Europe that were acquired as part of its takeover in April of Corus Group Plc, Bloomberg says, noting soaring iron ore prices because of rising demands. Reuters, quoting Tata's Managing Director B. Muthuraman, said that the project was expected to produce 700 million to one billion tons of ore per year. The initial phase of the undertaking will involve exploration and detailed feasibility assessments followed by construction of the mine and beneficiation facilities, Tata Steel adds. About SODEMI SODEMI is a 100% state owned company formed for development of the mineral resources in the country. It already has a manganese mining operation in Ivory Coast and a partnership for gold mining and another for drilling. About Tata Steel Headquartered in Mumbai, India, Tata Steel Limited -- http://www.tatasteel.com/ -- manufactures steel, and ferro alloys and minerals. Tata Steel's products are targeted at the auto sector and construction industry. With wire manufacturing facilities in India, Sri Lanka and Thailand, the company plans to emerge as a major global player in the wire business. In April 2007, the company completed the acquisition of Corus Group plc. Corus' main steelmaking operations are located in the United Kingdom and the Netherlands with other plants located in Germany, France, Norway and Belgium. Corus produces carbon steel by the basic oxygen steelmaking method at three integrated steelworks in the United Kingdom at Port Talbot, Scunthorpe and Teesside, and at one in the Netherlands at IJmuiden. As reported in the Troubled Company Reporter-Asia Pacific, Standard & Poor's Ratings Services, on July 10, 2007, lowered its corporate credit rating on Tata Steel to 'BB' from 'BBB.' The outlook is positive. The rating is removed from CreditWatch, where it was placed on Oct. 18, 2006, with negative implications after its announcement on acquiring Corus Group PLC (Corus, BB-/Stable/--). Moody's Investors Service, on Sept. 18, 2007, affirmed the Ba1 corporate family rating of Tata Steel Ltd, and changed the outlook to negative from stable. |
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