A plaque to commemorate the occasion was unveiled by the South African Deputy President, Phumzile Mlambo-Ngcuka.
Tata Steel is rated as the most efficient global steel producer and is 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.
Managing Direct of Tata Steel B Muthuraman told guests at the ceremony that the high carbon ferrochrome plant would 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 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 2 expansion is approved, it will result in additional investment of possibly R400 million.
The plant will take about a year to complete and is scheduled to be commissioned in the fourth quarter of 2007. It will create some 1 000 construction jobs at the peak of construction and 130 permanent jobs once the plant is fully operational. The possible phase 2 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.
Mr Muthuraman said South Africa had been selected from an initial short list 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/ logistics arrangements, and its strong financial institutions.
Richards Bay's Industrial Development Zone (IDZ) 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 plant will produce 135 000 tons of High Carbon ferrochrome, annually, during phase 1, 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.
Raman Dhawan, Managing Director of Tata Africa Holdings, said the Tata Group regarded 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 and telecommunications.
Mlambo-Ngcuka said the government welcomed and celebrated the major injection of R650 million by Tata into the country’s economy.
“We believe that this will hugely benefit our economy and contribute towards our economic objectives of growing the economy and creating jobs that are so desperately needed by our people,” she said.
She described India as a key partner for South Africa, adding that both countries were members of the India-Brazil-South Africa (IBSA) tri-lateral agreement.
“Our political and economic relations are sound and are based on mutual respect and concern for each other’s development,” she said, adding that India was among the top ten countries investing in South Africa.
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.
