Mumbai: Tata Steel plans to build an iron ore pellet plant with an annual capacity of four million metric tons, to support its proposed steel project in Bangladesh. . "We''ll need pellets for our Bangladesh steel project. So we''ll build a pellet plant," said a senior TISCO official. "We''re still deciding on the location...it could be either in Bangladesh or in India."

Tata Steel is India''s second largest steelmaker with an annual capacity of four million tons. Although the official didn''t give details on the investment needed for the pellet plant, industry analysts estimate that a four-million-ton pellet plant would cost about Rs600 crore ($130.91 million). Iron ore pellets are used to make sponge iron, which is melted in an electric furnace to make steel.

Tata Steel recently said it is building a steel plant with a 2.4 million capacity in Bangladesh, as part of the Tata group''s $2-billion investment proposed in that country.

The investment includes building a fertiliser plant and a power generating facility. TISCO official said that that company l is likely to face a shortfall of about 250,000 tons of hot metal due to a planned shutdown of one of its blast furnace at its Jamshedpur facility.

Tata Steel recently said it proposes to shut the blast furnace from December. 1, 2004. "Although the shutdown would result in a shortfall of about 350,000 tons (of hot metal), we''re confident of meeting about 100,000 tons from our other blast furnaces," said the official.

Iron ore and other raw material are melted in a blast furnace to make hot metal, which is then rolled into various other categories of steel. He said that Tata Steel has negotiated with other steelmakers to meet the expected 250,000-ton shortfall.

"We''ve spoken to SAIL (Steel Authority of India Ltd.) and some other global steelmakers to meet this deficit," he added. State-owned SAIL is India''s largest steelmaker with an annual capacity of 13 million tons.