TEHRAN, Feb. 2 (Mehr News Agency) - Indian firm Tata Steel has announced that it has finalized its negotiations with Iran over the building of a steel production plant in the Persian Gulf country.
The giant steelmaker is planning to build a three million ton steel production plant in the Persian Gulf Special Economic Zone, a report said here on Friday.
Meanwhile, Business Standard said on its Thursday issue that Tisco eyes 3mn ton Hormozgan steel plant, owned by National Iranian Steel. Tata Iron and Steel Company is in talks to take over the 3 million ton Hormozgan steel plant in Iran, according to a source close to the negotiations. The steel plant is owned by National Iranian Steel Company.
For Tata Steel, acquiring an existing plant would be much cheaper than setting up a new one, the source said, adding that the company had dispatched a team of executives to visit the steel plant near the port city of Bandar Abbas.
Discussions are at a preliminary stage an industry source said. Tata Steel is said to be negotiating for a management contract first to take over the operations of the steel plant. Once the management contract was in place, the company would seek to acquire the ownership of the Iranian plant, the source said.
A Tata Steel spokesman said the company was exploring the possibility of either taking over an existing steel plant or setting up a new plant in Iran. The spokesman, however, declined to reveal the plants that were being eyed for acquisition. In February, India's Ambassador to Iran had said the Tata and Essar groups were planning to build steel plants in Bandar Abbas, Business Standard commented.
The Hormozgan plant has a capacity of around three million tons and has its own source of iron ore in north Iran. Tata Steel has been looking at acquiring steel plants overseas as part of its plans to expand production capacity to 15 million tons by 2010.
India's largest private sector steel producer's capacity is expected to rise to 5.2 million tons in 2005-06 from 4.35 million tons following expansion of one its blast furnaces.
The company is also eyeing steel capacities in the range of 1-3 million tons in South East Asia, China and central Europe. Tata Steel recently completed acquisition of Singapore-based NatSteel for $285 million. NatSteel's operations are spread across seven countries, spread mostly over South East Asia.
Tata Steel, part of the Indian conglomerate Tata Group, was last year ranked 56th in the list of steelmakers around the world with output of 5.3 million tons.
The Tata Group - which owns Tetley tea and Daewoo trucks - has operations in more than 50 countries.
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