New Delhi: The world's third largest steel maker Posco Friday said it has tied up with Indian Metals and Ferro Alloys (IMFA) to set up a ferrochrome making unit at Orissa in which it will hold 24 percent stake.
"Both companies decided to establish a company with shares of Posco at 24 percent and IMFA at 76 percent in the the new electric furnace, which was completed last November," Posco said in a newsletter.
The annual production of the furnace built within IMFA's Chudwar factory in Orissa would be 35,000 tonnes.
India's largest ferrochrome manufacturer IMFA operates five furnaces with a cumulative capacity of 1.5 lakh tones per annum. Ferrochrome is used for making stainless steel.
Under the agreement with IMFA, Posco will purchase at low cost ferrochrome produced through this new furnace for 25 years, while IMFA will procure chrome and electricity at cheaper rate from its mines and electric power facilities to achieve profits from this joint venture company.
Posco is an existing customer for IMFA.
The tie-up would help Posco to partially meet its ferrochrome import requirement, which at present stands at 4.8 lakh tonnes per year. Posco has a similar arrangement in South Africa with an annual capacity of 35,000 tonnes per annum.