Calcutta, June 16: Tata Steel will set up a thermal power plant in Orissa in a joint venture with Jasper Industries.

Tata Steel and its wholly owned subsidiary Rawmet Ferrous Industries have entered into a share subscription and shareholders agreement with Jasper Industries for the purpose, the company said in a filing to the stock exchange.

Tata Steel and Rawmet together will hold a 26 per cent stake in the joint venture entity, Bhubaneshwar Power Pvt Ltd, while Jasper Industries will own the rest.

The JV will set up the power plant having 2x67.5 mega watt capacity at Anantpur village in Tack, Orissa.

Jasper Industries has power stations in south India and has long been associated with the Tata group.

The power plant is likely to require an investment of nearly Rs 600 crore.

The plant will be of good use for Rawmet, which manufactures 50,000 tonnes of high carbon ferro chrome.

Tata Steel had bought Rawmet in early 2007 for about Rs 101 crore.

Power is one of the most critical raw material for making ferro chrome.

A captive unit will help Tata Steel keep the cost of production under check.

Rawmet’s ferro chrome plant is located near Cuttack.