IMFA to invest Rs 900 crore to increase production at Odisha mines

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In an effort to meet its future capacity, Indian Metals & Ferro Alloys Ltd (IMFA) will invest another Rs 900 crore over the next five to six years to increase production at its Mahagiri and Sukinda mines in Odisha.

“For our mining investments, we plan to do underground (in mining) in the coming years in a gradual manner. We will aim to reach 850,000 tonnes in FY26, then 950,000 tonnes and finally 1.2 million tonnes by FY27, ”IMFA CFO Prem Khandelwal told Business Standard.

Currently, the company’s total mining output is 650,000 tonnes. Although the company has not incurred any major investment expenditure for the current fiscal year, for fiscal year 23, it plans to set up a 100,000 tonne plant in Kaliganagar, for an investment of approximately Rs 550 crore.

“Our expansion to Kalinganagar, we plan to spend primarily through internal accruals as we will be debt free by March FY22. We also have cash of around Rs 230 crore like today (Nov 25, 2021), ”Khandelwal said without revealing debt reduction plans by March FY22.

The company’s debt stands at Rs 280 crore, he added.

Although the Union Ministry of Mines recently amended mining laws allowing the sale of captive ore on the open market, IMFA does not intend to participate.

“We have no surplus to sell on the open market, even after we hit 1.2 million tonnes. Everything will be consumed by our own stoves coming to Kalinganagar. In fact, we could also consider adding a third kiln in the same location since the land is available, ”Khandelwal said.

The IMFA mainly targets the Southeast Asian market, with 90% of its production exported and the remainder destined for the domestic market.

“In the future, too, we will focus on the overseas market, but the domestic market share is expected to increase by a further 10% given the boost given to infrastructure projects,” Khandelwal said.

Ferroalloys find wide application in the stainless steel sector.

“Even though our capacity is being increased, we will not seek new markets until FY 25 for sales, as demand from existing customers is itself increasing and the links are already in place,” Khandelwal said.

During the September quarter (T2FY22), the company recorded the highest quarterly turnover on record of Rs 653.16 crore.

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