New Delhi, Jan 07 (Agencies): Tata Steel on Friday said it has inked a joint venture agreement with Nippon Steel for setting up a Rs 2,300 crore specialty steel-making line having a capacity of 60,000 tonnes per annum at Jamshedpur to cater to the domestic auto sector.

The project is expected to be operational in three years time.

Tata Steel would hold a majority 51 per cent stake in the unnamed joint venture entity while the Japanese major would have the rest 49 per cent stake, the domestic steel major said in a filing to the Bombay Stock Exchange.

"The project (Continuous Annealing and Processing Line) will be set up at a capital cost of approx. Rs 2,300 crore and is expected to come on stream in 2013," it said, adding that
the entity was expected to be incorporated within a month.

The joint venture entity would source steel from Tata Steel's Jamshedpur plant and use Nippon Steel's technology for production of high-grade cold-rolled steel sheet to meet the growing needs of the Indian automobile sector.

"The chairman of the joint venture company will be nominated by Nippon and the Managing Director will be nominated by Tata Steel", the statement said.

Continuing with strong sales momentum, country's buoyant automotive market even defied the usual trend of low sales in the last month of a year by posting robust growth in their dispatches during December 2010.