Tata Refractories bags magnesite mine in China

Written by Arindam Sinha | Jamshedpur, Aug 27 | Updated: Aug 28 2008, 05:51am hrs
Tata Refractories Ltd (TRL), a Tata Steel associate, is going to sign a memorandum of understanding (MoU) for a magnesite mining lease in China. The mine will make its operations in that country even more cost-effective.

TRL has so far been buying raw magnesite from mine owners in China.

Outsiders can now legally own mines in China .

We havent got the (magnesite) mine yet. We were invited by the mayor of Bayuquan only eight days ago to sign a memorandum of understanding (MoU), TRL managing director CD Kamath told FE. He said the mining area, located in the same district as the TRL plant, has been identified. The company now has to do exploration work and sign the MoU.

China is the sole supplier of raw magnesite to the world.

It will not only become cheaper, it will be more assured in terms of quality, quantity and timeliness of supply, said Kamath, who added that owning a mine would protect the company from price fluctuations and sudden supply constraints.

According to the TRL managing director, the mine will be under a company formed for the purpose. TRL has a 64,000 tonne per annum magnesite-based refractory unit in Bayuquan in north-east China , near the port city of Dalian in the province of Lianoning , which commenced production in January 2007.

The plant recently completed the second phase of its capacity expansion. The plants original capacity was 30,000 tonne.

We have a lot of scope in China and are going to invest further; we will go for both---raw material and backward integration, said Kamath.

TRL is now planning a third phase expansion of the plant that will take capacity to one lakh tonne per annum.

We might go in for a third phase of expansion at the same location that could increase capacity to 100,000 tonne per annum, said the TRL managing director.

The Tata Refractories plant is near the Orind Industries refractory unit. Orind was among the first lot of Indian companies to set up operations in China , in the mid-1990s.