Ferrochrome major plugs into power

Indian Metals and Ferro Alloys Ltd (Imfa), the country’s biggest ferrochrome manufacturer, will soon diversify as an independent power producer.

Though the company has so far not firmed up its plans, it is looking forward to set up plants to sell power on a merchant basis.

“Things are at a preliminary stage but in the next two to three years we will definitely diversify as independent power producers,” said Prem Khandelwal, vice-president, Imfa.

Khandelwal said the company is mulling setting up a “big” power plant near its coal mine in Orissa and will freeze some of the details on the initiative in the next six months.

Imfa is currently the biggest fully integrated ferrochrome player in the country with a capacity of 235,000 tonne per annum (tpa) with an additional 40,000 tpa operationalised this month.

“Since we have experience in setting up and operating captive coal-based power plants, diversifying into power is a good opportunity,” Khandelwal said.

Imfa is currently generating 108 megawatt of captive power and another 30 mw for further captive consumption will be operational by November 2010. “Beyond this, we are setting up another captive power plant of 120 mw capacity which will be ready by fiscal 2012. After this, our expansion into bigger power plants will begin,” he said.

The company is planning its first merchant plant in Orissa as it has linkage to a coal mine project under a joint venture. The company has 74% participation in the joint venture, called Utkal Coal Ltd, which is developing a 196 million tonne (mt) coal mine.
Imfa will have rights to mine 4 mt of coal per year from the mine.
Currently, merchant power plants are in vogue as the companies get as high as Rs7-8 per unit on sale of power during peak season, especially summer.

Jayant Deo, managing director and chief executive officer, Indian Energy Exchange, said, “Currently, because of continuing monsoon, the day ahead power is below Rs3, and the peak demand is somewhere around Rs4-5, but private players are very aggressive on merchant power plants as returns are lucrative.”