Jindal Stainless buys 49% stake in Indonesian nickel smelter facility for $157 mn
1 min read 28 Mar 2023, 07:52 PM ISTThe acquisition will ensure long-term availability of nickel to Jindal Stainless, as it plans expansion to meet India’s rising demand for stainless steel
PremiumMUMBAI : Jindal Stainless Ltd (JSL) said Tuesday it has acquired 49% equity stake in a Nickel Pig Iron (NPI) smelter facility in Indonesia for $157 million (about ₹1,300 crore @ ₹82/dollar).
Nickel is a key component required in the production of stainless steel and this acquisition will ensure long-term availability of nickel to the company, as it plans expansion to meet India’s rising demand for stainless steel.
“This collaboration provides JSL with the benefits of backward integration, as it will have a stake in the NPI business. The facility is expected to be commissioned within two years, with an annual nameplate production capacity of up to 200,000 metric tonnes of NPI with an average of 14% Ni content. This marks the first-ever strategic partnership entered into by an Indian company to secure a stake in nickel reserves globally, as India lacks significant nickel ore resources," the company said in a statement.
The company said that this collaboration will enhance value for shareholders. “This path breaking collaboration will enhance value for stakeholders with JSL acquiring a stake in nickel supply to create raw material security for its SS operations. This acquisition will usher a sharper competitive advantage to JSL in Indian and international markets," Abhyuday Jindal, MD, Jindal Stainless was quoted in the release.
Shares of Jindal Stainless ended 4.01% lower at 279.95 apiece at the NSE.
Nickel is a key component in stainless steel and is a key factor in stainless steel business across the globe.
In recent times, geo-political issues, logistical hurdles, pandemic induced constraints etc. affect the demand supply dynamics of nickel, thereby increasing the cost and uncertainty for its user industries such as stainless steel.
“Currently, JSL meets bulk of its nickel requirement through stainless steel scrap and NPI/ ferro nickel and this collaboration will secure an ample supply of NPI for JSL", the press release added.
