Steel Major Buys 49% Stake in Indonesian Nickel Co, Stock Soars 201% from Low
By Malvika Gurung
Investing.com -- Shares of stainless steel manufacturer Jindal Stainless (NS: JIST ) surged 3.84% to Rs 290.7 apiece on Wednesday, as the company acquired a 49% stake in the Indonesian nickel pig iron company New Yaking Pte for a deal value of around $157 million.
Founded in 1970, Jindal Stainless (JSL) is the largest stainless steel manufacturing company in India.
The company has entered into a collaboration agreement with New Yaking Pte. Ltd for investing in the development, construction and operation of a Nickel Pig Iron (NPI) smelter facility located in an industrial park in Halmahera Islands, Indonesia.
As per the ‘Collaboration Agreement’, Jindal Stainless will acquire a 49% equity interest in the facility for consideration of almost $157 million.
Through the agreement, JSL will ensure the availability of nickel for the long term, given India’s deficient position in nickel ore.
For a better understanding, the price trend of nickel is a major factor in the global business of stainless steel. However, geopolitical issues, logistical hurdles, and pandemic-induced constraints, among others often affect the demand-supply dynamics of nickel, thereby increasing the cost and uncertainty for its user industries such as stainless steel.
In such a scenario, the strategic collaboration of JSL with New Yaking Pte shall usher a sharper competitive advantage to the former in domestic as well as international markets.
“The Facility is planned to be commissioned within 2 years, with an annual nameplate production capacity of up to 200,000 metric tonnes of NPI with an average 14% Ni Content,” said JSL in a press release on Tuesday.
Further, this is the first-ever strategic partnership entered into by an Indian company for securing a stake in nickel reserves globally.
Jindal Steel’s shares have jumped over 53% in a year, and are soaring 200.7% from their 52-week low.
To understand more about trading and navigating the markets at a time like this, Investing.com is conducting a webinar on Wednesday, March 29, 2023 at 7:30 pm Indian Time.
You can find more details here: Where Should You Invest Right Now? Heres Warren Buffetts Advice
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or