At a glittering ceremony held at Richards Bay on August 21, 2006, the South African Deputy President, Ms Phumzile Mlambo-Ngruka unveiled the plaque to commemorate the commencement of construction of the R 670 million Ferrochrome Plant of Tata Steel KZN (Pty) Ltd.

The South African Deputy President, Ms Phumzile Mlambo-Ngruka applauded the Tata Group for its impressive commitment in South Africa and said that with this investment, the relationship of Tata with South Africa has deepened. In her speech, Ms.Mlambo-Ngruka said, “We appreciate that Tata Steel is planning to invest in coal and manganese mines in South Africa. The ferrochrome plant is off course very significant as it is well located in an Industrial Development Zone, and will assist to attract further investments. In addition it advances our mineral beneficiation Policy, direct & indirect jobs. We welcome and celebrate this major injection to our economy by TATA to the tune of R 650 million rands to open its High Carbon Ferro Chrome Plant in our Country. We believe 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.”

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.

Mr Ratan Tata, Chairman, Tata Group said in a message, “Richards Bay was chosen by Tata Steel for its plant to produce 135,000 Mt of High Carbon Ferro Chrome because apart from being the biggest and most efficient port in South Africa, it offered several other advantages. With the receipt of environmental and other clearances from the concerned ministers it will now be ‘no looking back’ for Tata Steel KZN Pty Limited. But for the cooperation and timely assistance from the various departments of the Government, these approvals would not have been possible. Tata Steel KZN is committed to commission the plant on schedule in October 2007”.

The South African Deputy President further added, “Besides Mr. Tata’s role as an investor of note in our country Mr. Ratan Tata continues to play a significant role at the level of being our esteemed member of the International Investment Council (ICC), where his input is both welcome and highly valued. The big presence and involvement of Tata Group in our country is a vote of confidence in our democracy. The philosophy of Tata with regard to investing in the improvement of lives of people is one I hope South African Corporate will emulate and I also know this is a wish shared by the Tata group, including my very good colleague here Mr. Shyamal Gupta, Chairperson, Tata International.”

The function was attended by Minister Essop Pahad, Minister in the Presidency, Dr Ndebele, Premier of Kwa Zulu Natal, Prof Ndabandaba, MEC Agriculture and Environmental Affairs of Kwa Zulu Natal, Dr Z Mkhize, MEC Finance and Economic Affairs of KwaZulu-Natal, Mr Denny Moffat, Mayor of Richards Bay, Mr B Muthuraman, Managing Director of Tata Steel Ltd, India, Mr Raman Dhawan, Managing Director of Tata Africa Holdings and Mr Somdeb Banerjee, Managing Director of Tata Steel KZN (Pty) Ltd.

Mr B Muthuraman, Managiing Director, Tata Steel Ltd 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 Bays 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.

Mr 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.

Mr Somdeb Banerjee, Managing Director of Tata Steel KZN, representative of the Tata Group thanked all the visiting and local dignitaries, as well as the municipality and public for their support throughout this journey.

Mr Banerjee said that if the phase 2 expansion was approved, Tata Steel might consider mixing South African and imported chrome ore for use in the two additional furnaces.

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.