Indian Metals And Ferro Alloys Expands Capacity As Domestic Ferrochrome Demand Rises

Indian Metals and Ferro Alloys Ltd. is ramping up existing ore mining capacity and setting up a new greenfield smelting capacity in Kalinganagar, Odisha, to cater to rising domestic demand for stainless steel.

India’s largest producer of ferrochrome that goes towards strengthening stainless steel, exports at least 95% of the commodity it produces from the two production sites in Odisha—Choudwar and Therubali. The company expects to cater to at least 35-40% of the domestic demand in the next three to five years.

Awareness is rising on the benefits of the lifecycle cost of stainless steel as against the initial acquisition cost of the alloy.

Stainless steel—that uses ferrochrome to get the anti-corrosive properties—is a niche product with a global production capacity of around 60 million tonne as against the carbon steel production capacity of 2 billion tonne, Subhrakant Panda, managing director of Indian Metals and Ferro Alloys, told BQ Prime in an exclusive interview. Hence, it is a premium product with better lifecycle cost, he said.

Historically, India had been exporting around 40-50% of the chrome it produced, as there were few takers for the metal within the country, Panda said. However, the stainless steel production in India has now reached the 3 Mtpa capacity and is likely to increase further as people have started to understand the benefits of the lifecycle cost—low maintenance, long durability due to non-corrosive properties provided by ferro chrome.

“This will provide us the opportunity to meet the domestic demand," Panda said. “We are setting up a 1,00,000 metric tonne per annum smelting capacity at Kalinganagar in Jajpur district of Odisha, which is the hub for stainless steel. Our smelters will be supported by an expansion of our chrome ore mining capacity to 0.9 Mtpa from 0.6 Mtpa at present,” Panda said.

“The mining capacity will later be ramped to 1.2 Mtpa in the second phase, which will be timed to an additional 1,00,000 metric tonne smelting capacity,” Panda said.

The company has chromite ore mining lease at Sukinda and Mahigiri in Odisha that will last up to 2049 and 2055, respectively. The mines have total proven reserves of 21 Mtpa and have been mined since the year 2000.

According to Panda, the construction activity on the first smelter will start around November-December of 2023, and will get commissioned by 2025. At the two mining sites of Sukinda and Mahagiri, the expansion activities will be spread out over six to seven years—that is around 2030-31.

The company will invest Rs 550 crore for the Kalinganagar greenfield expansion for the two smelters, and Rs 1,000 crore for the expansion of mines.

The ferrochrome producer mostly exports to far-eastern countries—China, Japan and Taiwan—since it is the epicenter of stainless steel production and provides logistical advantages to the company.

Back home, Indian Metals and Ferro Alloys has a strong relationship with Jindal Stainless Steel, Shah Alloys and other producers. Internationally, it has partnered with POSCO of South Korea, with whom they have a 76:24 joint venture to produce ferrochrome with assured offtake commitments in addition to a long-term contract. The company also has a long-term contract with Nisshin Steel, and supplies on a consistent basis to companies in China and Taiwan.