Oman

Concerns about chrome ore supplies

Oman’s first ferrochrome plant is set to go into commercial mode soon after trial operations, but a planned expansion depends on the availability of additional captive Omani chrome ore, the company operating the plant has said.

Vinod Narsiman, partner, Al Tamman Indsil Ferro Chrome, said the captive ore available with the group would be just about sufficient to take care of the needs of the first phase which has capacity to produce 75,000 tonnes per year.

"Exploration and subsequent availability of new chrome ore mine finds in Oman is proving to be quite a challenge. Any expansion plan would be confirmed only after assuring ourselves that there would be sufficient feed of Omani chrome ore available to the extent required on a long-term basis," he said.

The plan is to double ferrochrome production capacity to 150,000 tonnes per year in the second phase by installing two additional furnaces to take the total to four. The company has completed the engineering design for the expansion, work for which was envisaged to begin later this year. The capital expenditure for the expansion is estimated to be between $45 million and $50 million. Projections are that once the two phases are in operation the company can expect to generate around $200 million in revenues annually.

The entire output will be exported as there are now no stainless steel facilities in the country.

Narsiman also said that as Omani chrome ore might not be available to the extent projected in the medium term, the company may be forced in the near future to import more than envisaged from supply sources like Pakistan. This would increase the cost of chrome input in the product as compared to earlier projected figures.

The company, a 50:50 venture between Muscat Overseas Group and India’s Indsil Group, is currently importing high-grade chrome which is mixed with local chrome ore. Most of the chrome ore used is from local mines.

Notwithstanding, inadequate local supplies, three ferrochrome smelter projects are in the planning stage. Metkore Alloys and Industries is in line to build the second plant of capacity 150,000 with an investment of around $150 million. The third smelter could be set up by Gulf Mining Materials. Another party is interesting in setting up a plant of capacity 150,000 tonnes.

It is hoped the smelters might encourage investors to set up downstream stainless steel plants.