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Our Bureau

Plans to use its low-cost manufacturing process

Mumbai May 23

Japanese steel maker Kobe Steel is in discussion with Goa-based Chowgule group for setting up a plant using its low-cost steel making process, say sources familiar with the discussions.

The manufacturing process involves conversion of low-grade iron ore into iron nuggets, which can then be fed into a blast furnace for steel making.

Joint Venture

Kobe is mulling a partnership with the Chowgule group, which owns iron ore mines in Goa, to set up a mill in India for commercially launching its new `IT mk3' technology.

It could be a joint venture between the two or one where Kobe merely provides the technology.

A senior team of officials from Chowgule, headed by its Managing Director, Mr Vijay Chowgule; Joint Managing Director, Mr Ramesh Chowgule; and Executive Director, Mr Netan Chowgule, is at present in Tokyo for a meeting with Kobe.

Ore Production

The official, however, described the meeting as "normal and routine", but indicated that the Kobe-Chowgule tie-up could be discussed.

Japanese wire agencies quoted a Kobe spokesman as saying that the two companies may agree to build a 5,00,000-tonne plant in India using the IT mk3 technology and that Kobe's investment in the venture could be in the region of 20 billion (about $165 million).

The Goa-based company produces about 4.5 million tonnes of iron ore annually, out of which over 3.5 million tonnes is exported. Part of the ore production is diverted to Chowgule's own pellet plant at Mandovi, which has a production capacity of 1.8 million tonnes.

New tech to cut material cost

Kobe's IT mk3 (Iron-making Technology Mark 3) process involves conversion of iron ore fines into iron nuggets of the same quality as pig iron. The chief benefit of the technology is claimed to be its ability to pare down cost of conventional iron making technologies by about 50 per cent through reduction in the cost of raw material and the manufacturing process involved. Kobe Steel began research on the technology in mid-1996 and a pilot plant having a production capacity of 3,000 tonnes was subsequently built, which started test operations towards end of 1999.

In March 2002, Kobe signed an agreement with Mesabi Nugget LLC to set up a demonstration plant in Minnesota, US, which commenced trial production in May 2003.

More Stories on : Steel | Alliances & Joint Ventures | Technology | Minerals

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