Tata Steel KwaZulu-Natal on Monday celebrated the start of construction of its R670-million ferrochrome plant at Richards Bay with a groundbreaking ceremony in the Industrial Development Zone, at Alton North area, in the largest port city in KwaZulu-Natal.
A plaque to commemorate the occasion was unveiled by Deputy President Phumzile Mlambo-Ngcuka.
Among the dignitaries present were Minister in the Presidency Essop Pahad, KwaZulu-Natal Premier S’bu Ndebele, Richards Bay mayor Denny Moffat and KwaZulu-Natal provincial minister of finance and economic affairs Zweli Mkhize, as well as Raman Dhawan, MD of Tata Africa Holdings, and Somdeb Banerjee, MD of Tata Steel KwaZulu-Natal.
Tata Steel is a global steel producer and the largest fully integrated chrome manufacturer in India, where its operations extend from chrome mining to beneficiation and the manufacture of ferrochrome for local and international markets.
The MD of Tata Steel India, B Muthuraman, told guests at the ceremony that the high carbon ferrochrome plant will be “the cleanest in the world” with state-of-the-art production processes.
Ferrochrome is used in the manufacture of stainless steel and the plant’s output will be exported to Tata Steel’s existing customers, principally in Asia, Europe and the United States.
“Tata Steel is considering doubling the size of the plant, from two furnaces to four, and a decision will be made after the first year of operation. If the phase-two expansion is approved, it will result in additional investment of possibly R400-million,” the company said.
The plant will take about a year to complete and is scheduled to be commissioned in the fourth quarter of 2007. It will create about 1 000 construction jobs at the peak of construction and 130 permanent jobs once the plant is fully operational.
The possible phase-two expansion would add another 50 permanent jobs.
“Tata Steel estimates that, apart from the direct job creation, some 800 additional jobs may be created by contractors and suppliers,” the company noted.
Muthuraman said South Africa was selected from an initial shortlist of eight countries. The final choice was between sites in South Africa and Australia, with South Africa winning “because of factors including power costs, skilled technological base and manpower, developed infrastructure and logistics arrangements, and its strong financial institutions”.
“Richards Bay’s Industrial Development Zone emerged as the most attractive destination as it satisfied all criteria and was an economically advantageous site for producing ferrochrome on a sustainable basis,” the company said.
The plant will produce 135 000 tons of high carbon ferrochrome yearly, during phase one, from ore imported from India and Iran.
Although South Africa is the world’s largest chrome producer, ore imports for the new plant will not deprive local miners of sales, nor will the ferrochrome exports compete with locally produced ferrochrome, as both the chrome ore as well as charge chrome produced in South Africa are of entirely different grades, Tata Steel said.
Dhawan explained that the Tata Group regards South Africa as a future economic power house and a key factor in economic development in Southern Africa.
“The investment in the ferrochrome plant showed Tata’s confidence in South Africa following its investments in various industries in the country, most notably the motor vehicle [industry] and telecommunications,” the company noted.
Banerjee said that if the phase-two expansion was approved, Tata Steel might consider mixing South African and imported chrome ore for use in the two additional furnaces.
A feature of the Richards Bay plant is the establishment of a locally owned operation to manufacture the chromite briquettes that will be used in the smelter.
“The local workers will be trained in briquette making by trained personnel from India, and the group will then produce briquettes for the smelter on a local contract basis.
“Tata Steel is currently developing plans to provide training and skills transfer to local employees,” the company concluded. — I-Net Bridge