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MOSCOW, Jan 25 (Reuters) Russia and India agreed on Thursday to build a plant producing 40,000 tonnes a year of titanium dioxide in the Indian state of Orissa, which New Delhi will finance through part-repayment of its debt to Russia.
Russia will take 30,000 tonnes of the plant's output, enough to meet about half its needs, when production starts in 2009, an official involved in the project told Reuters.
''The agreement has already been signed,'' said Yuri Parkhomenko, general director of Giredmet, the Russian state body responsible for equipment supply and construction.
''The plant will start production in another two years,'' he added.
Titanium dioxide is a pigment that provides brightness in everything from paint to sunscreen and chocolate wrappers.
The deal was signed during a visit to India by Russian President Vladimir Putin. India is the second-biggest buyer of Russian weapons after China and the two countries on Thursday signed a deal to construct nuclear power plants in India.
Russian Defence Minister Sergei Ivanov told Russian news agencies this week the titanium dioxide venture would be financed by India's debt repayments to Russia.
''The project has been under discussion for several years already,'' said Andrei Alexandrov, general director of the international association Titan, which groups titanium firms in the former Soviet Union.
Parkhomenko said the joint venture would be between St Petersburg-based Tekhnokhimholding and India's Kerala Minerals&Metals Ltd.
The Russian company would process the titanium dioxide and supply it to end-users in Russia, he said.
Russia does not produce its own titanium dioxide, analysts said. The product is made from ilmenite ore, which is also used in production of titanium sponge -- the raw material for titanium metal used in aircraft and golf clubs.
Russia's VSMPO-Avisma is the world's largest producer of titanium products for the aerospace sector.
It purchases ilmenite from Ukraine and last year said it was also looking to import raw materials from Sri Lanka, India and Vietnam.
Russian state arms trader Rosoboronexport last year acquired a majority stake in VSMPO-Avisma.
REUTERS SRS HS1726
Russia will take 30,000 tonnes of the plant's output, enough to meet about half its needs, when production starts in 2009, an official involved in the project told Reuters.
''The agreement has already been signed,'' said Yuri Parkhomenko, general director of Giredmet, the Russian state body responsible for equipment supply and construction.
''The plant will start production in another two years,'' he added.
Titanium dioxide is a pigment that provides brightness in everything from paint to sunscreen and chocolate wrappers.
The deal was signed during a visit to India by Russian President Vladimir Putin. India is the second-biggest buyer of Russian weapons after China and the two countries on Thursday signed a deal to construct nuclear power plants in India.
Russian Defence Minister Sergei Ivanov told Russian news agencies this week the titanium dioxide venture would be financed by India's debt repayments to Russia.
''The project has been under discussion for several years already,'' said Andrei Alexandrov, general director of the international association Titan, which groups titanium firms in the former Soviet Union.
Parkhomenko said the joint venture would be between St Petersburg-based Tekhnokhimholding and India's Kerala Minerals&Metals Ltd.
The Russian company would process the titanium dioxide and supply it to end-users in Russia, he said.
Russia does not produce its own titanium dioxide, analysts said. The product is made from ilmenite ore, which is also used in production of titanium sponge -- the raw material for titanium metal used in aircraft and golf clubs.
Russia's VSMPO-Avisma
It purchases ilmenite from Ukraine and last year said it was also looking to import raw materials from Sri Lanka, India and Vietnam.
Russian state arms trader Rosoboronexport last year acquired a majority stake in VSMPO-Avisma.
REUTERS SRS HS1726
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