The company will invest US$157M to acquire a 49% stake in Indonesia-based New Yaking

India’s largest stainless steel manufacturer, Jindal Stainless, has moved to secure a long-term source of nickel for its austenitic stainless steel production. The deal will see the construction of nickel pig iron (NPI) production facilities with a capacity of 200ktpy, containing 14% Ni (28ktpy Ni). The plant will be located on Indonesia’s Halmahera Island and is planned to be commissioned within two years.

Jindal stainless produces 2.9Mt stainless steel and the company’s nickel requirement reportedly totals 125ktpy Ni. India is nickel-resource poor, meaning the country’s stainless steel industry is heavily reliant on imports of ferronickel and stainless steel scrap. In May last year, the Indian government removed import duties of 2.5% on ferronickel and other steel raw materials, before reinstating the rate in November. Despite this, given the current geopolitical climate and volatility displayed by the nickel price, Jindal Stainless hopes that securing NPI will provide long-term raw material security for its operations.

Indian stainless steel producers have traditionally received primary nickel units in the form of ferronickel, supplied by Indonesia’s PT Antam. However, NPI now represents by far the most abundant form of nickel to the market. Project Blue estimates Indonesian NPI production totalled 1.1Mt Ni last year (excluding material converted to nickel matte), which was mostly exported to Chinese stainless steel producers and consumed by integrated stainless steel operations in Indonesia.