Indian Metals and Ferro Alloys (IMFA), India’s biggest ferrochrome manufacturer, and Korean company POSCO, a leading global stainless steel maker, have joined hands for producing ferrochrome in India.
Indian Metals and Ferro Alloys (IMFA), India’s biggest ferrochrome manufacturer, and Korean company POSCO, a leading global stainless steel maker, have joined hands for producing ferrochrome in India.
IMFA has forged the alliance with the Korean steel giant for its latest expansion programme under which it will boost its installed capacity of ferrochrome from the current 240,000 tonnes per annum (tpa) to 275,000 tpa. This will also give IMFA the ease to pre-sell the produce to its JV partner.
Ferrochrome, produced from chrome ore, is used in value addition of stainless steel and hence the demand for stainless steel has a direct bearing on the demand for ferrochrome.
Chrome ore, an oxide of chromium and iron, is found in solid state in mines in mineral rich states. This chrome ore is extracted from the mines and then heated at extremely high temperatures using coke and coal to reduce the chemical composition of the ore to iron-chromium alloy.
This alloy, also called smelted ferrochrome is left to solidify and then sold to stainless steel manufacturers. The current capacity of IMFA is being rolled out of five furnaces located in Orissa and the company is in the process of commissioning its sixth furnace which will raise its capacity by another 35,000 tpa.
“POSCO had been our customer for almost 10 years and now we have formed a joint venture to strengthen this partnership,” said Subhrakant Panda, managing director, IMFA.
Panda said under the terms of the joint venture, the new 30 MVA (million volt amperes) furnace will be finally hived off into a 100% subsidiary of IMFA. POSCO will then be offered a 24% stake in this subsidiary at a price of $5 million. IMFA will use this money to part-finance its debt of Rs380 crore.
This partnership has been inked for an initial period of 25 years. So far, IMFA have been selling ferrochrome to PPSCO on a one-year contract basis.
Over the last 10 years, POSCO had become the biggest customer of IMFA in India and had been purchasing up to 35,000 tpa of ferrochrome from the company.
“Under the terms of the JV, we will not only be selling them 35,000 tpa of ferrochrome from the new furnace but we will also sell them an additional 50,000 tpa of ferrochrome,” Panda said, adding, IMFA will manage the operations of the subsidiary.
He said the company plans to reach full load of 35,000 tpa in the next five to seven days and will start selling by next quarter.
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