Jindal Stainless said on Tuesday that it would acquire a 49 per cent stake in Indonesia-based New Yaking, as it seeks to secure a supply of nickel, which is a key ingredient in the production of stainless steel. The deal was done for $157 million.
The deal involves constructing and operating a nickel pig iron facility in Indonesia’s Halmahera Islands. The plant, which will be commissioned within two years, will have an annual production capacity of up to 200,000 metric tonnes, as per the company.
This investment comes at a time when India is deficient in nickel ore. Total nickel of 125,000 tonnes is required for steel production of 2.9 million tonnes. Out of the requirement 15-16 per cent is sourced through nickel pig iron. With this acquisition, the company expects to fully meet its nickel pig iron needs.
This is the first-ever strategic partnership entered into by an Indian company for securing stake in nickel reserves globally.
Abhyuday Jindal, MD, Jindal Stainless said, “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.”
The company said that the nickel price trend has been a key factor in stainless steel business globally, especially amid the ongoing geo-political issues, logistical hurdles and pandemic-induced constrains that affected demand supply dynamics of nickel.
Currently, JSL meets bulk of its nickel requirement through stainless steel scrap and NPI/ ferro nickel.