Bhutan Ferro Alloys Ltd is going to put up two more furnaces _ one of 9 MVA and the other of 5 mva _ to produce silicon metal and possibly ferro chrome.
At present, Bhutan Ferro Alloys operates one furnace of 27 mva and produces about 18,000 tonne of ferro silicon. It is a joint venture with the Bhutan
government holding 25 per cent share, Tashi Group, a private enterprise, holding 20 per cent, and Marubeni Corporation of Japan having 20 per cent. The rest of the stake is with the general public.
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As per the terms of the agreement 50 per cent of the production is to be sold in India and rest is to be exported globally.
According to ferro alloy producers in India, the company and more particularly, Marubeni are violating the terms of this agreement by selling most of the production in India.
This is because there is no import duty in India on Bhutan products not even the countervailing duty, in place of excise duty.
This confers an undue advantage on a producer who is a competitor on a high value item like ferro silicon or for that matter on any ferro alloy
Export of power to India is the most profitable item for Bhutan and now power intensive products are added. The existing production of 400 mw has been put up through Indian financial and technical assistance and another 600 mw are likely to come up with further Indian assistance in the next few years.
The cost of power to ferro alloys and calcium carbide industry in Bhutan is said to be around 50 paise per unit which is a great advantage. and more power now being available power intensive industry like ferro alloys in India will face a threat to its existence because Bhutan has the power to have a very large ferro alloy industry.
Bhutan Ferro Alloys has applied for clearance of the expansion of the project to the government and before it is granted it is time for Indian producers to point out how the present agreement is being violated by the company. by not sticking to the export agreement which is to be handled by Marubeni.
Nava Bharat to close unit
Nava Bharat Ferro Alloys has decided to close down the Madhya Pradesh unit which has two furnaces with a capacity of about 10 mva. The closure has come about because of shortage and high cost of power. It is said that only about two units are now working in Madhya Pradesh out of over twenty which had come into operation a few years ago
But Nava Bharat has a set up another ferro alloy unit in Orissa with two furnaces of 16.5 mva each. One furnace has been producing ferro chrome for Tatas for export on conversion basis.
Nava Bharat is thinking of setting up a captive power plant of 30 mw in Orissa based on coal on build-own-operate , build, own and operate, basis The site is close to coal and water and well served by railways.
In Andhra Pradesh Nava Bharat already has a captive power plant of 50 mw to serve its three furnaces of 16.5 mva each . It also draws power from NTPC and Andhra Gas Corporation and keeps its power costs down.
Maharashtra Elektrosmelt
Maharashtra Elektrosmelt Ltd, which is a subsidiary of SAIL, is going ahead with its plan for putting up 4.2 mw power plant using the flue gases of the furnaces.
It has also got approval to install a 30 mw power plant and the unit will depend less on MSEB power when these plants start operating.
For the ferro alloy producers there is no salvation other than putting up captive power plants.