Asia Energy - Coal and Power for Bangladesh

Tata Steel applies for coal block in Bangladesh for steel project
Pratim Ranjan Bose



Kolkata , March 2

TATA Steel has applied for a coal-mining block in Bangladesh on long-term lease. The proposal is part of the group's initiative to build a 2.4-million tonne steel plant for manufacturing flat products in Bangladesh at an estimated investment of $1 billion. The feasibility study for the project, being carried out by Dasturco, is expected to be ready by March 31, 2005.

Though the company plans to use natural gas as a primary source of energy for making steel, it is also on the lookout for a captive coal block in Bangladesh.

Talking to Business Line, the Tata Steel Deputy Managing Director, Mr T. Mukherjee, said the proposed steel plant would use ore pallets as the basic raw material, which would then be charged to produce steel through the sponge iron route.

"Bangladesh has coal reserves in its north-eastern parts, and has shown preliminary interest in offering one such block to us. However, a formal decision on the same is still awaited."

The allocation of the coal block is important for Tata Steel to set up a pelletisation plant in Bangladesh and bring in the ore from the company's captive mines in India.

Dr Mukherjee, however, maintained that the company was yet to take a decision on this. "There are some benefits in importing pellets from India and we are still studying the same."

The Tata group has also proposed investments in power and fertiliser in Bangladesh. Tata Consulting Engineers (now TCE) and the public sector Projects and Development India Ltd are handling the feasibility studies for the power and fertiliser units, respectively.

On the company's proposed Rs 700-crore merchant coke oven plant at Haldia in a joint venture with WBIDC, Dr Mukherjee said, in the first phase, the project would produce 0.8 million tonnes of metallurgical coke which could be expanded to two million tonnes. The project will also include a 60-MW thermal power plant.

"Right now, we are not considering production of any by-products, to keep the project cost at a reasonable level."

Apart from catering to the requirements of Tata Steel, the project would supply metallurgical coke to domestic and international customers. The surplus power generated will be sold to the West Bengal State Electricity Board.