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 India's stainless steel major Jindal Stainless Ltd (JSL) has inked a collaboration agreement with New Yaking Pte Ltd for development, construction and operation of a nickel pig iron (NPI) smelter facility located in an industrial park in Halmahera Islands, Indonesia.

According to JSL, as per the agreement, it will acquire 49 per cent stake for about $157 million in the new greenfield project under a new joint venture company.

"The strategic collaboration offers benefits of backward integration as JSL would have stake in the business of NPI," JSL said.

The new smelter facility is planned to be commissioned within two years, with an annual nameplate production capacity of up to 200,000 metric tonnes of NPI with average 14 per cent nickel content.

This is the first-ever strategic partnership entered into by an Indian company for securing stake in nickel reserves globally as India is deficient in nickel ore, JSL said.

The collaboration will enhance value for stakeholders with JSL acquiring a stake in nickel supply to create raw material security for its stainless steel operations. This acquisition will usher a sharper competitive advantage to JSL in Indian and international markets, said Abhyuday Jindal, Managing Director, JSL.

The nickel price trend has been a key factor in stainless steel business across the globe.

Further, geopolitical issues, logistical hurdles, pandemic induced constraints etc. often affect the demand supply dynamics of nickel, thereby increasing the cost and uncertainty for its user industries such as stainless steel.

Currently, JSL meets bulk of its nickel requirement through stainless steel scrap and NPI/ferro nickel and this collaboration will secure an ample supply of NPI for JSL.