India's Jindal Stainless Ltd on Tuesday said it would acquire a 49% stake in Indonesia-based New Yaking Pte. Ltd for $157 million as it seeks to secure a supply of nickel, a key ingredient in the production of stainless steel.
The deal includes the construction and operation of a nickel pig iron facility in Indonesia's Halmahera Islands. The plant will be commissioned within two years and will have an annual nameplate production capacity of up to 200,000 metric tonnes, the company said in a statement.
For the company's annual stainless steel production of 2.9 million tonnes, the total requirement of nickel is 125,000 tonnes, of which 15%-16% is sourced through nickel pig iron. Following this acquisition, the company expects to fully meet its nickel pig iron needs.
The investment from India's biggest stainless steel manufacturer comes at a time when India is deficient in nickel ore, it said.
Nickel prices had slumped 28% over about seven weeks, weighed down by concern about weak demand and rising output in major nickel ore producer Indonesia, before rebounding last week.
Abhyuday Jindal, managing director, told Reuters in an interview last month he expects the firm's exports to jump to 25%-30% of overall sales in the next fiscal year beginning April, from an estimated 12% in the current year.
