IMFA Will Venture into Power, overseas mining
Ferro chrome maker is planning to set up a 1300 MW power plant and is scouting for chrome ore and thermal coal assets abroad.
Mar 02, 2011
DNA Money

After meeting backward integration targets and forming a venture with Korean giant Posco, Indian Metals & Ferro Alloys (IMFA) country's largest ferro chrome producer, has set sights on commercial power generation and acquisition of mining assets overseas.

"We are at a preliminary stage of finalising our new business initiatives, but these are two focus areas for our next level of growth, apart from ferro chrome production, "Subhrakant Panda, Managing Director of Odisha-based IMFA said".

IMFA currently has an installed capacity of 275,000 tonnes per annum (tpa).

Under its power venture, IMFA is planning to set up a 1,300 MW (2x660 MW) power plant and has submitted a proposal to the Odisha government.

The company has a captive power generation capacity of 108 MW, which provides complete backward integration for its power needs.

"By the end of this quarter, we will augment our capacity by another 30 MW and by the end of the next fiscal we will add another 120 MW," said Panda.

"By 2013, IMFA will have a surplus power of 60-70 MW which it will sell to the grid. "Surplus power also gives us the headroom for further capacity expansion, "Panda said, adding it can help the company further expand capacity by 125,000 tpa.

IMFA is also looking at acquiring chrome ore and thermal coal assets overseas as yet another business opportunity.
"There are mines available in South Africa, Turkey, Phillipines, etc, which we might look at, but we are looking for mines which can add value and makes right business sense for the company," Panda said.

The growth of ferro chrome is directly related to the growth in the stainless steel sector. "With the government focus on infrastructure, demand from Railways, industrial segment and home appliances, demand for stainless steel is expected to be firm for the coming several years," said an analyst with a domestic brokerage firm who covers the stainless steel sector.

He said in 2010, out of total installed capacity of 2 million tonnes in India operating at 75% capacity utilisation, the consumption was upto 1.2 million tonnes and rest was exported.

"This consumption is expected to grow to 1.8-1.9 million tonnes in the next four-five years," he said, adding that stainless steel demand in the world will be led by China and India.

Panda said there is a huge scope of growth in India as the per-capita consumption of stainless steel in China is 8-9 kg, in India it is merely 2 kg, he said.

Ferro chrome, which is produced from chrome ore, is used for the manufacture of stainless steel. Chrome ore, an oxide of chromium and iron, is extracted from the mines and then heated at extremely high temperatures using coke to reduce the chemical composition of the ore to iron-chromium alloy.

This alloy, also called smelted ferro chrome, is left to solidify and then sold to stainless steel manufactures.

Manufacturing of ferro chrome is a highly power intensive process and all ferro alloy producers have captive units to reduce power costs.

For any information relating to IMFA Group or to enquire about a Press Release issued by us please contact:

Mr Kishore Mohan Mohanty
Bhubaneswar
email: kishoremohanty@imfa.in