Have you integrated the recently acquired Tata Steel ferrochrome business with your operations?

Yes. Incidentally, we are putting up a greenfield project in Kalinganagar with a capacity of 1 lakh tonnes. In fact, we are going to commission the first furnace in the next couple of weeks. The unit we acquired from Tata Steel is literally across the road from our new project. So, from an operational efficiency and general administrative control perspective, it works extremely well for us.

Over the last three years, we have embarked on a significant capacity expansion programme. We plan to double our chrome ore mining production to 12 lakh tonnes annually and cross 10 lakh tonnes in this fiscal. We are also expanding ferrochrome production from 2.60 lakh tonnes annually to 5 lakh tonnes.

Tata Steel’s ferrochrome unit at Kalinganagar will add 1 lakh tonnes, and another 50,000 tonnes are likely to be added by mid-2027 after the completion of a partially completed furnace project at the Tata Steel ferrochrome plant. In addition, the greenfield project that we are commissioning this month will contribute another 1 lakh tonnes.

When all these projects are completed, our total installed capacity will exceed 5 lakh tonnes annually. We expect to produce about 4 lakh tonnes in FY27 compared to 2.65 lakh tonnes produced last year, an increase of 50 per cent. For FY28, we target a production of 4.75 lakh tonnes to 5 lakh tonnes. By FY31, we also expect our mining operations to reach a peak output of 12 lakh tonnes annually.

We have a 200 MW coal-based power plant and 4.5 MW of solar power capacity. We have entered into agreements with JSW Energy and Enfinity Global for 135 MW of hybrid renewable energy capacity, combining wind and solar. Power from the JSW project is expected to start flowing from August, while the Enfinity Global project is expected to commence next year. We expect about 35–40 per cent of our total power consumption to come from renewable energy sources.

How is the demand for ferrochrome amid the rally in prices?

Ferrochrome prices have increased from about ₹1.10 lakh per tonne to about ₹1.25 lakh per tonne due to supply constraints. If buyers push prices down too aggressively, eventually production becomes unviable, capacity begins to shut down, and prices rebound sharply. Over 90 per cent of our production has been exported, primarily to the Far East.

However, we expect this ratio to shift to about 60:40 by next year due to increasing domestic demand. We are relatively insulated from the West Asia crisis, as we do not do business there. However, our freight costs have increased, although ferrochrome prices are very supportive.

How secure is your chrome ore supply?

Our mining leases are valid until 2049 and 2055. We are increasing ore production to 12 lakh tonnes annually with an investment of ₹1,200 crore. We are transitioning from open-cast mining to underground mining. With underground mining, infrastructure for peak planned capacity must be built from the outset. Unlike open-cast mines, you cannot simply add another excavator later to increase production. We are continuing exploration activities to determine whether we can increase production beyond the currently planned 12 lakh tonnes.

Will a rally in ferrochrome prices sustain?

We continue to see supply constraints, though developments in South Africa need to be monitored. South Africa has the world’s largest chrome ore reserves and was once the largest ferrochrome producer, but it lost the position to China, largely due to rising inland logistics costs and increasing electricity tariffs. However, recently South Africa lowered the power tariffs for two ferrochrome producers, Glencore and Samancor, although this benefit has not been extended to the entire industry. With the fall in South African ferrochrome production, exports of chrome ore increased. Despite having no ore reserves, China increased ferrochrome production from roughly 6.50 lakh tonnes per month to about 9.50 lakh tonnes per month entirely on imported ore. If lower power tariffs revive South African ferrochrome production, then their chrome ore exports from the country could decline, affecting Chinese ferrochrome production and maintaining the overall market balance. Alternatively, there will be an oversupply of one lakh tonnes if both South Africa and China increase output, which would put pressure on prices. However, South Africa's production will become commercially unviable if prices fall sharply.

Do you expect China to increase production?

China accounts for nearly 40–50 per cent of global output. However, China is also a relatively high-cost producer, as it is entirely dependent on imported chrome ore. In fact, China’s cost of production has effectively provided a floor to global ferrochrome prices. Prices simply cannot remain below a level where nearly half of the world’s production becomes commercially unviable. Moreover, China’s entire ferrochrome output is for domestic consumption, as it accounts for roughly half of global stainless steel production. China also imposed duties on ferrochrome exports.

How competitive is IMFA in the Indian market?

Our competitiveness comes from integrated operations, spanning chrome ore mining, ferrochrome smelting, and captive power generation. In addition, we are virtually debt-free. We completed the ₹700 crore acquisition entirely through internal accruals. Subsequently, we raised debt for ongoing expansion projects. We expect to return to a completely debt-free position by next year.