Tata Steel mining arm, Tata Steel Mining Limited (TSML), formerly TS Alloys Limited, has announced to double its ferrochrome production capacity from 450,000 t to 900,000 t per year amidst growing stainless steel demand in the country and projected uptick in global demand and exports.
TSML is planning for aggressive growth and its current ferrochrome manufacturing capacity in India is 450,000 t per annum. This is inclusive of Tata Steel’s own production and the material manufactured by the company’s conversion arrangements with other furnace operators.
TSML acquired three chromite mines in the Odisha auctions in 2020: Sukinda, Saruabil and Kamarda mines for which the leases were granted for 50 years. The current annual capacity of the mines exceeds 1.5 mn t thereby making the company the largest player in chrome ore mining in India.
“We will take the organic as well as the inorganic route to augment our Ferro Chrome manufacturing capacity in India, leveraging the strength of the good quality of ore available. This will make TSML the top Ferro Chrome player in India and among the top five globally. It makes sense to focus on value addition and convert the chrome ore to ferrochrome,” the company informed in a press note, adding that the ore should be used optimally to make ferrochrome to serve its growing base of Indian and global stainless steel manufacturers.
However, Tata Steel declined to divulge further details on the capacity expansion while speaking to SteelMint. Doubling ferrochrome production capacity could entail fresh investments in existing capacity or acquisitions through the IBC route, it is believed. In fact, M&As could be a faster way of upgrading capacity. Also, no exact timeframe has been given for the proposed expansion although more details are expected soon enough.
The company is working to develop commercial mining opportunities in addition to the ferroalloys business. It deserves mention that Tata Steel has acquired a dominant stake in chromite mining in the country after the 2020 auctions and with steel prices going strong, along with robust domestic and export demand, the case for capacity expansion has never been stronger.
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