Jindal Stainless to invest Rs 1,300 cr in Indonesia to set up nickel pig iron smelter: MD

New Delhi: Jindal Stainless Ltd (JSL) will invest around Rs 1,300 crore to set up a greenfield nickel pig iron (NPI) smelter facility in Indonesia to enhance its raw material security, the company's MD Abhyuday Jindal said.

JSL is the first Indian company to own nickel reserves in any offshore market, he said, adding that the company meets the bulk of its nickel requirement through stainless steel scrap and remaining ferro nickel.

The investment will be made through a joint venture company formed with New Yaking Pte. Ltd of Indonesia where JSL will own a 49 per cent stake, Jindal told PTI in an interaction on Tuesday.

"To ensure our long-term nickel availability, we have entered into a collaboration agreement with New Yaking Pte. Ltd to invest in the development, construction and operation of an NPI smelter facility located in an industrial park in Halmahera islands. Pursuant to the agreement, we will acquire a 49 per cent equity interest for a consideration of around USD 157 million (around Rs 1,300 crore)," he said.

When asked about the timeline for the project, Jindal said the facility is planned to be commissioned within two years, with an annual nameplate production capacity of up to 2,00,000 metric tonnes of NPI with an average of 14 per cent Ni (nickel) content.

"This is the first-ever strategic partnership entered into by an Indian company for securing a stake in nickel reserves globally as India is deficient in nickel ore. The collaboration will enhance value for stakeholders with JSL acquiring a stake in nickel supply to create raw material security for its stainless steel (SS) operations," Jindal said.

The new venture will also put JSL in an advantageous position in the domestic and international markets as far as raw material security and cost of manufacturing of stainless steel is concerned as nickel alone contributes 50 per cent to the production cost of SS, the industrialist said.

He further said that the proposed investment will be financed largely through internal accruals. The investment will be made in two tranches. Around Rs 750 crore in 2023-24 and another Rs 550 crore in the 2024-25 financial year.

Part of O P Jindal Group, Jindal Stainless is a leading Indian stainless steel maker with an annual melting capacity of around 2.9 million tonnes. It has two manufacturing complexes in Haryana and Odisha and an overseas manufacturing unit in Indonesia.

Besides, it has six service centres in India and one in Spain.