IMFA to invest Rs 900 crore to boost production from Odisha mines

In a bid to cater to its upcoming capacity, Indian Metals & Ferro Alloys Ltd (IMFA) will be investing another Rs 900 crore over the next five to six years to boost production from its Mahagiri and Sukinda mines in Odisha.

“For our mining capex, we plan to do underground (in mining) in coming years in a phased manner. We will be looking to reach 850,000 tonne in FY26 then to 950,000 tonne and finally 1.2 million tonne by FY27,” Prem Khandelwal, chief financial officer of IMFA told Business Standard.

Currently, the company’s total mine production stands at 650,000 tonne. While the company has had no major capital expenditure for the current fiscal, for FY23, it plans to set up a 100,000 tonne plant at Kaliganagar, capex for which is about Rs 550 crore.

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

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

Although the Union mines ministry recently tweaked mining laws allowing captive ore produce to sell in open market, IMFA has no plans to participate.

“We do not have any surplus to sell to the open market even once we have expanded to 1.2 million tonne. It will all be consumed by our own upcoming furnaces at Kalinganagar. In fact, we may also look to add another third furnace at the same location since the land is available,” said Khandelwal.

IMFA largely caters to the South East Asia market with 90 per cent of its production getting exported and balance for the domestic market.

“Going ahead too, our focus will be on overseas market, but share of domestic is expected to rise by another 10 percent given the thrust on infrastructure projects,” said Khandelwal.

Ferroalloys find wide application in the stainless steel sector.

“Even though our capacity is being augmented, we will not be looking for any new markets until FY25 for sales as demand from existing clients itself is on the rise and the tie-ups are already in place,” said Khandelwal.

In the September quarter (Q2FY22), the company reported the highest ever quarterly turnover of Rs 653.16 crore.