Haldia, Feb. 18: Tata Steel plans to invest Rs 1,550 crore in a new coke oven plant at Haldia to meet its captive requirement.

The company has procured 180 acres of land at the port town and hopes to start production by April 2007, Tata Steel deputy chairman T. Mukherjee said.

The project, which also includes 90-megawatt power generation through waste heat recovery method, is being set up by its joint venture company, Hooghly Met Coke and Power Company Ltd.

Calcutta Port has provided 180 acres to the company by culling out from the area it had leased out to the closed Hindustan Fertilisers plant.

To begin with, it would set up a merchant coke oven unit with a capacity of 1.2 million tonnes per annum for an investment of Rs 1,200 crore.

In the second phase, it will add another 0.4-mt capacity at an investment of Rs 350 crore.

B.K. Singh, managing director of Hooghly Met Coke, said the company hoped to expand the nameplate capacity to 2.5 mt if there was demand for the product.

This would translate into an additional investment of Rs 1000 crore. But the company would require more land for that expansion.

The company has placed orders for most of the equipment. It would be using the Chinese technology to reduce the cost of production by Rs 1,000 a tonne.

The company has signed a contract with Beijing Sino Steel Industry and Trade group to source technology from China.

At present, Tata Steel will use the coke from this unit exclusively for steel making in Jamshedpur.

This will reduce the cost of production substantially as coke contributes to 60 per cent of the input cost. Singh said the coking coal cost would come down by 14 per cent a tonne.

The company, which had signed a joint venture pact with WBIDC in January 2005, had earlier decided on a capacity of 0.8 mt.

The project is being financed at 1:1 debt-equity ratio. The debt part has been already tied up. The equity part would come from Tata Steel’s internal accruals.

Besides coke production, the waste heat generated in the process would be utilised to produce 90 mw of power. A power purchase agreement has been signed with WBSEB for sale of surplus power.