Indian Metals and Ferro Alloys (IMFA) is planning a ₹1,200 crore expansion to double its annual chrome ore production to 1.2 million tonnes. The project aims to lift ferrochrome capacity to 5 lakh tonnes by FY28. Investors may monitor how the company balances this capital spending with its target to transition 40% of its power needs to renewable energy sources.
Indian Metals and Ferro Alloys (IMFA) has announced a major expansion project worth ₹1,200 crore to scale up its mining and smelting operations. The company plans to double its annual chrome ore mining output to 1.2 million tonnes. This strategic investment is designed to support a significant increase in ferrochrome production capacity, targeting a rise from 2.60 lakh tonnes to 5 lakh tonnes per year by FY28.
Scaling Capacity and Production Targets
The growth plan follows the acquisition of Tata Steel's ferrochrome business in Odisha. This asset added 1 lakh tonnes of capacity to IMFA’s operations and is located near the company's new greenfield project. Management expects to commission the first furnace of this facility shortly. Furthermore, a partially completed furnace project at the acquired site is scheduled to add another 50,000 tonnes to capacity by mid-2027. Based on these projections, the company anticipates ferrochrome production to hit 4 lakh tonnes in FY27, moving toward the 5 lakh tonne mark by FY28.
Operational Integration and Power Strategy
IMFA maintains an integrated business model that includes captive mining, smelting, and power generation. A key monitorable for investors is the company’s shift toward renewable energy. To support its energy-intensive smelting operations, which currently rely on a 200 MW coal-based plant, IMFA has signed agreements with JSW Energy and Enfinity Global for 135 MW of hybrid renewable power. The goal is to ensure that 35-40% of the company's total power consumption comes from renewable sources by FY31.
Market Dynamics and Financial Context
The company currently benefits from strong ferrochrome pricing, which has hovered around ₹1.25 lakh per tonne. While mining expansion requires significant capital spending and the transition to underground mining involves complex infrastructure development, IMFA’s balance sheet remains relatively debt-free. Historically, the company has focused on exports, sending over 90% of its production to the Far East. However, management is now aiming for a 60:40 ratio between domestic and export sales, reflecting expectations of rising demand from the Indian stainless steel sector.
Global Factors and Risks
Global ferrochrome prices are sensitive to supply-side developments in South Africa, which holds the world's largest chrome ore reserves. Any major fluctuation in South African production levels, combined with shifting demand from China—the world's largest consumer of imported ore—can create price volatility. While IMFA’s integrated operations provide a competitive buffer, the sustainability of its profit margins will depend on its ability to manage production costs, successfully execute the planned furnace commissioning, and adapt to changing global price floors.