MUMBAI, JUNE 13: Tata Steel has planned an equity infusion of around $675 million for its joint venture (JV) project with Iranian Mines and Mining Industries and a 100% subsidiary in Iran by 2009, together with an additional $300 million investment by 2011.

The project cost for the first and second JVs would be $1.2 billion and $300 million respectively. Both the projects will have a debt-equity ratio in equal proportion and Tata Steel’s equity commitment for these two projects would be around $375 million.

The first joint venture would include setting up a project for manufacturing billets and slabs with 49% stake each with its Iranian counterpart with the remaining 2% held by a pension fund of the Iranian government. It would manufacture billets and slabs with a capacity of 1.5 million tonne per annum. The second JV too would have a similar shareholding pattern in its mining of unexplored iron ore mines at the Gol-e-Gohar mines in Kerman province of Iran.

Further, Tata Steel will also set up a wholly-owned subsidiary for manufacturing 3 million tonne billets in two phases at a cost of $1.2 billion. The equity infusion in this project would be another $600 million split equally between two phases.

Sharing details about its mega foray in Iran, Tata Steel managing director B Muthuraman said, “the idea is to manufacture billets at the Iran project at low cost and feed it as raw material to the Nat Steel facility in Singapore.”