The Hindu Business Line : Refinery, mining projects to be revived

THE Tamil Nadu Government has said that it would revive two large projects - a refinery and an iron ore mining project - that have been pending for long.

Moving the demand for grants to the Industries Department, the Minister, Mr Nainar Nagenthran, said that the Nagarjuna Oil Corporation's 6-million-tonne-a-year refinery would be revived.

Construction on the joint venture between the Nagarjuna Group and the Tamil Nadu Industrial Development Corporation Ltd (TIDCO) to set up a Rs 3,480-crore refinery at Cuddalore would recommence in April and the project would be completed by October 2007.

(It must be mentioned that TIDCO has once again invited bids for a 5-lakh tonnes ethylene capacity naphtha cracker project.

It had earlier invited bids for a naphtha cracker project and also tied up with Mitsui of Japan for the project, which, however, did not take off.

The Government undertaking has now invited expressions of interest from companies in the petrochemical sector for the naphtha cracker project. Earlier, it had said the project could come up at either Ennore, an industrial suburb to the north of Chennai, or Cuddalore, which is located to the south of Chennai.)

TIDCO has also re-launched the Rs 250-crore iron ore mining and beneficiation project at Kanjamalai, Salem and Videappanmalai, Tiruvannamalai district.

The low-grade ore available from the mines will be beneficiated with an annual capacity of 10 lakh tonnes.

It has the potential to generate additional investments of Rs 200 crore for palletising the iron ore.

It may be recalled that the Nagarjuna Oil Corporation's refinery was to have commenced production in 2002. The Hyderabad-based Nagarjuna group, which had earlier acquired it from the Pennar group, had a 51 per cent stake through its flagship Nagarjuna Fertilizers and Chemicals Ltd.

TIDCO was to pick up a two per cent stake. Nagarjuna Oil also signed an agreement with Oman Oil Corporation for the latter to pick up a 26 per cent stake in the venture. At that time it was scouting around for a partner to pick up the balance equity, which along with a marketing agreement, was crucial to the company achieving financial closure.

The Nagarjuna group was hoping that it would be able to rope in one of the public sector oil companies or a multinational oil company such as Caltex or Mobil as an equity partners.

But, IOC had made it clear that it was not interested in picking up a stake in the project, since it had acquired the Government's shares in Chennai Petroleum Corporation Ltd,

The Nagarjuna group had spent close to Rs 500 crore on the project as of 2002, with some of the equipment even landing at the site.

Caltex was to provide the technical services and ABB Lummus, the process engineering. Nagarjuna Oil Corporation officials had at that time told Business Line that the Rs 2,320-crore debt had been tied up, including a Rs 770-crore foreign currency loan from KfW of Germany.

The balance Rs 1,550 crore of rupee debt was to come from a consortium of institutions and banks led by IDBI.

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