Hit by the prevailing industrial downturn, the country's largest stainless steel producer, JSL, has shelved its $1.2-billion joint venture project with Indonesia's PT Antam TBK in the South East Asian country.
"The project is no more commercially viable, so we have decided to shelve it," JSL Director (Strategy & Business Development) Arvind Parakh told PTI.
JSL Ltd (formerly Jindal Stainless) had last year entered into a joint venture with the mining firm PT Antam to build a 20,000-tonne ferro-nickel plant and 3-lakh-tonne stainless steel slab unit in Indonesia. However, with prices of nickel, a vital input for producing the alloy, dipping sharply, the Indian firm has decided to drop the project.
"Nickel prices were hovering at $20,000-22,000 tonnes last year when we entered in to the 55:45 JV with PT Antam, but now the prices have plummeted to $10,000 tonnes making the project unviable," he added.
However, the Indian firm would continue to source nickel from the Indonesian company, which is currently scouting for possible buyers of JSL's stake in the joint venture, he said.
JSL has already spent about $4.5 million in the project and hopes to recover it soon, Parakh added.
The company has capacity to produce 7.2 lakh tonnes of the alloy in India. It is spending Rs 5,700 crore to set up a 1.5 million tonnes per annum stainless steel plant in Orissa.