Calcutta, Feb. 4: Gopalpur in Orissa is set to get the country’s first titanium special economic zone (SEZ).
The city-based Saraf Agencies Pvt Ltd has signed a memorandum of understanding (MoU) with two Russian state-run agencies for the proposed SEZ that will process titanium from ilmenite ore.
The MoU was signed during the recent visit of Russian President Vladimir Putin and the project will entail an investment of $250 million (around Rs 1,200 crore).
The two Russian entities that will take part in the project are Vnesheconombank or the Bank for Foreign Economic Affairs and JSC Technochim Holding, which is a St Petersburg-based public sector undertaking.
Alloys of titanium are used in the aerospace industry, for both airframes and engines. As it is resistant to seawater, titanium is used for propeller shafts, rigging, and other parts of ships exposed to salt water. Titanium dioxide is used extensively in the paints industry as it is permanent and has good covering power.
“We have been pursuing this project for the past 10 years in Orissa because of the high mineral content in beach sand along the coastline,” said Rahul Saraf, who is a director of Saraf Agencies.
While the Russian firms will have a 55 per cent stake in the project, there will be no financial participation from them. They will provide the technology to process titanium from ilmenite ore.
The Indian government plans to use this project to set off part of the debt in the rupee-rouble account and will, therefore, invest $125 million in the titanium SEZ.
Saraf Agencies will pump Rs 175 crore into the project and the remaining amount will be raised as loan.
The company received an in-principle approval for the SEZ on August 23 last year. Though SEZs have now become a contentious issue, Saraf does not expect any hiccups to occur in obtaining the final approval as the interest of the Indian government is involved in the deal.
The ilmenite ore will be provided by Indian Rare Earths Ltd, a subsidiary of the atomic energy department of the Union government.
While the SEZ will spread over 550 acres, the plant will come up on 250 acres and land for the project has already been identified.
Saraf Agencies plans to invite allied industries like paints and pharmaceuticals to set up base in the SEZ so that they can get easy access to titanium. The company has also applied for mining lease to become self reliant in raw material.
The integrated chemical and metallurgical complex in Orissa will produce 110,000 tonnes of titanium slag, 40,000 tonnes of titanium dioxide pigment, 10,0000 tonnes of titanium sponge and 70,000 tonnes of high purity pig iron per annum.
The company expects to start production in two years after getting the final approval for the SEZ. Russia will take 30,000 tonnes of the plant’s output in addition to 40,000 tonnes of titanium slag annually, amounting to a total value of $250 million.