Jindals eye mining assets abroad

Calcutta, June 6: Jindal Stainless Ltd is scouting for ferro alloy mining assets abroad.

The move follows the company’s plans to expand its capacity in India by three times in the future.

V.S. Jain, managing director and CEO of Jindal Stainless, said the company would look at acquiring mines to feed its ferro alloy plants coming up in phases in Orissa.

Chrome ore is a key ingredient of stainless steel. Jindal Stainless has a captive ore mine in Orissa to meet its requirements.

However, with the massive integrated expansion plans involving production of ferro alloys, the captive mine is insufficient to meet the rising needs.

The largest domestic stainless steel maker is procuring chrome ore from the domestic market, mainly from Orissa Mining Corporation.

The company’s 0.6-million-tonne plant at Hisar, Haryana is being expanded to 0.9mt, while a 1.6mt capacity is coming up at Kalinga Nagar, Orissa in phases.

The company’s new 1.5-lakh-tonne ferro chrome plant in Orissa has gone on stream, while ferro manganese and silico manganese plants — each having a capacity of 50,000 tonnes — will start production this year. A 250mw power plant will also come up in the first phase.

The company will invest Rs 2,250 crore in the first phase.

Chrome ore and concentrate is in tight supply this year, more so after a leading domestic producer stopped supply in the local market. Jain wants India to stop exporting chrome ore and chrome concentrate to increase availability within the country.

Jindal Stainless is expecting secured supply from Orissa Mining Corporation while pinning hope on a mining lease in Orissa, which has 90 per cent of chrome deposits.

Jain is, therefore, scouting for mines abroad even as he clarified that nothing was in an advanced stage.

The company will also need more manganese after the expansion. It is exploring the possibilities of tie-ups with leading manganese mining companies such as Manganese Ore India Ltd and other private mine owners as well.

Jindal Stainless is starting the power plant without a captive coal block at present. However, it expects an allotment in the near future. Power is a key ingredient for ferro chrome and accounts for 40-50 per cent of the cost.

In the second phase, which will be completed by 2010, the company will set up a 0.8mt stainless steel plant at an estimated cost of Rs 5,600 crore. The company has 1,200 acres of land registered under its name while Jindal Stainless has possession of 700 acres, which is enough for the second phase.

Jindal Stainless will use scrap for steelmaking through the electric arc furnace route in the second phase. In the third phase, which will add another 0.8mt stainless steel capacity, Jindal Steel will put up a blast furnace since it expects to get an iron ore mine lease by then.