What is a ferrochrome project report?
A ferrochrome project report is a detailed project report (DPR) for a plant that smelts chrome ore with coke in a submerged arc furnace to make high carbon ferrochrome, the chromium alloy that stainless steel depends on. It sets out the process, furnace, power and ore needs, market, project cost, finance, five-year projections, DSCR and break-even.
Promoters use it to size the furnace and raise a term loan; lenders and power utilities use it to judge whether the plant can carry its debt and its power load.
Also known as: ferro chrome plant project report, high carbon ferrochrome project report, ferrochrome business plan, charge chrome plant DPR.
Ferrochrome manufacturing plant cost in India
Our sample report models a plant making 11 metric tonnes per day of high carbon ferrochrome, or 3,630 MT per year over 330 days. It starts at 60% capacity and reaches 80% by Year 5, selling at ₹1,18,000 per MT ex-works.
Plant and machinery is the largest block of cost, and the furnace with its electrode system is the largest single item within it. Commercial plants built around bigger furnaces, a sintering or pelletising plant and their own power line cost several times this figure.
| Land and site development | 107.22 |
|---|---|
| Building and civil works | 301.04 |
| Plant and machinery | 545.37 |
| Other fixed assets | 53.17 |
| Contingencies | 42.32 |
| Preliminary and pre-operative | 26.23 |
| Working capital margin | 106.78 |
| Total | 1,182.13 |
| Promoter's contribution (25%) | 295.53 |
|---|---|
| Term loan from bank (75%) | 886.60 |
| Cash credit limit (separate) | 320.32 |
| Total project cost | 1,182.13 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments; lowest yearly DSCR 1.32. All figures are illustrative.
Ferrochrome manufacturing process
High carbon ferrochrome is made by carbothermic reduction: carbon from coke strips oxygen from the chromium and iron oxides in chrome ore. The reaction needs very high heat, which an electric furnace supplies around the clock.
- Ore preparation
Lumpy ore is sized, and fine concentrate is briquetted or pelletised so gas can escape through the furnace burden.
- Batching and charging
Ore, coke and quartzite are weighed to a recipe and fed through chutes to keep the electrodes buried in charge.
- Smelting
Current through three carbon electrodes heats the charge to about 1,700 °C, reducing the oxides to molten alloy.
- Tapping
Metal and slag are tapped together every two to three hours into ladles, then separated by density.
- Casting and slag recovery
The alloy is cast in beds; slag is crushed and jigged to recover trapped metal before it goes to the dump.
- Crushing, testing and packing
Cooled alloy is broken and screened to the lump size buyers order, analysed for chromium, carbon and silicon, and packed in jumbo bags.
Which furnace technology suits a ferrochrome plant?
The choice of furnace and feed preparation sets capital cost, power per tonne and how much cheap fine ore you can use. Most chromite mined in India comes out as fines, so feed preparation matters as much as the furnace.
| Semi-closed submerged arc furnace, lumpy ore and briquettes | Lowest capital cost and the usual choice for a first plant; power use per tonne is higher, and too many fines make the furnace run unevenly. |
|---|---|
| Closed furnace with pelletised, preheated feed | Uses fines well and cuts power per tonne; furnace gas can be recovered as fuel. Needs a pelletising and sintering plant and much higher investment. |
| DC arc furnace | Can smelt fines directly without agglomeration, but is less common and needs specialist design and operating skills. |
| Fines briquetting unit | A low-cost add-on for a semi-closed furnace: fines are pressed with a binder into briquettes before charging. |
Plan the feed first: the share of fines in the ore you can buy should decide whether you add briquetting or pelletising, not the other way round.
Raw materials for ferrochrome production
Chrome ore is the largest cost, and smelting power is carried with raw materials because it goes into every tonne. Odisha was India's only chromite producing state in 2021-22 and holds more than 96% of its resources, so ore availability, grade and freight to the plant shape the project.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Chrome ore and concentrate | 48% | 941.50 |
| Smelting power | 30% | 588.43 |
| Metallurgical coke and reductants | 15% | 294.22 |
| Electrode paste | 4% | 78.46 |
| Quartzite and fluxes | 3% | 58.84 |
| Total | 100% | 1,961.45 |
Raw materials are 65.4% of sales in the sample. The Indian Bureau of Mines puts ore use at around 2.5 MT of chrome ore per MT of ferrochrome; the exact ratio depends on ore grade.
Machinery for a ferrochrome plant
The submerged arc furnace and its transformer together take more than half of the machinery budget in our sample. Pollution control is not optional here: the fume extraction and bag filter system costs about as much as raw material handling.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Submerged arc furnace with electrode system | Smelts the charge; Soderberg electrodes are slipped down as they burn | 190.88 |
| Furnace transformer and HT substation | Steps grid power down to high current at low voltage | 109.07 |
| Raw material handling and batching | Stores, weighs and conveys ore, coke and quartzite | 65.45 |
| Fume extraction and bag filter | Captures furnace dust before gases are released | 65.44 |
| Ladles, casting beds and EOT cranes | Receive, move and cast molten alloy | 43.63 |
| Crushing and screening plant | Breaks alloy to buyer lump sizes | 38.18 |
| Cooling water system | Cools the furnace shell, electrode clamps and transformer | 16.36 |
| Laboratory with XRF analyser | Checks chromium, carbon and silicon in each tap | 16.36 |
| Total plant and machinery | 545.37 | |
Costs are the sample report's estimates. Furnace prices depend heavily on rating and supplier; get current quotations before you finalise.
Power, water and manpower for a ferrochrome plant
A ferrochrome plant is in effect a large, steady power consumer. The power contract is often the deciding approval, so it belongs in the report from day one.
| Smelting power | About 4,500 kWh per MT of ferrochrome as estimated by the Indian Bureau of Mines; ₹588.43 lakh in Year 3 of our sample |
|---|---|
| Auxiliary power and fuel | Cranes, crushers, fans and lighting: ₹223.02 lakh in Year 3 of our sample, 7.4% of sales |
| Power connection | High-tension supply with a dedicated substation; the sanctioned load and tariff category should be confirmed with the utility before the loan file is closed |
| Water | Mostly closed-loop cooling for the furnace and transformer, with make-up water for evaporation |
| Manpower | 70 people in our sample: 11 in management and supervision, 24 skilled operators and 35 semi-skilled and unskilled workers, working in shifts |
| Slag | Roughly 1 to 1.3 MT of slag per MT of alloy (indicative), so the site needs space for slag handling and metal recovery |
Licences, BIS and approvals for a ferrochrome plant
| Product standard and BIS | IS 1170 (Ferrochromium) is under mandatory certification through the Steel and Steel Products Quality Control Order, in force from 8 November 2024 as of October 2026; you need a BIS licence for the grades you sell |
|---|---|
| Pollution board consent | Consent to establish and consent to operate under the Air and Water Acts from the State Pollution Control Board, with conditions on dust, slag and stack emissions |
| Power | HT connection sanction for the furnace load, with electrical inspection of the substation before charging |
| Factory licence | Registration under the Factories Act or the state's labour code rules, with approved plant layout |
| Business registration | Udyam (MSME) registration where the investment fits, and GST registration |
Approval names and categories differ by state. Confirm the current list with the state pollution board and industries department.
Who buys ferrochrome in India?
Stainless steel melting shops use most of the high carbon ferrochrome produced, so demand rises and falls with stainless steel output. Large integrated producers sell mainly to big mills and export markets, which leaves room for smaller plants to supply regional buyers.
- Stainless steel producers
- Induction furnace stainless steel units
- Alloy and tool steel makers
- Foundries making chromium castings
- Ferro alloy traders and exporters
Price moves fast: ferrochrome is traded on weekly prices and auctions. A project report should test the plant at lower selling prices and higher ore costs, not just at today's rates.
Mistakes that weaken a ferrochrome project report
- Using an average power tariff
Smelters pay a specific HT tariff with demand charges and duties. A wrong rate can turn a viable plant into a loss on paper or in practice.
- Assuming full chromium recovery
Some chromium always stays in the slag. Output must be worked out from ore grade and a realistic recovery, not from the ore tonnage alone.
- No ore supply plan
Ore is bought from a small number of mine owners and auctions. Lenders want to see where ore comes from, at what grade and with what freight.
- Leaving out slag and dust handling
Slag dumps, metal recovery and bag filter dust need land, equipment and consent conditions; skipping them under-states both cost and approval time.
- Ignoring receivables
In our sample, customer credit is the largest part of working capital, at ₹316.85 lakh in Year 1. A thin cash credit limit leaves the plant short of ore.
How NPCS helps you plan a ferrochrome plant
- Furnace size and feed routeMatch furnace rating, briquetting or pelletising to your ore and budget.
- Power and ore cost modelWork out cost per tonne from your tariff, ore grade and freight.
- Bank-ready project reportProjections, DSCR, sensitivity and working capital in your lender's format.
- Approvals and layoutPlant layout, slag yard, power load and the approvals list for your state.
NPCS's published client list includes 116 assignments in metal products, one of them for ferrochrome, and the NPCS project team has prepared industrial project reports since 1994.
What's inside the ferrochrome sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS ferrochrome project reports
These are ferrochrome project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Low Carbon Ferrochrome | Low Carbon Ferrochrome : 15,000 MT/Annum | ₹40.01 crore | 27% | 56% | Get this report |
| Ferro Alloys (Low Carbon Ferrochrome (LCFC), Ferro Molybdenum (FeMo), Ferro Vanadium (FeV), Ferro Titanium… | Low Carbon Ferrochrome (LCFC), 20 MT Per Day Ferro Molybdenum (FeMo), 40 MT Per Day Ferro Vanadium (FeV), 20 MT Per Day Ferro Titanium, 20 M… | ₹97.75 crore | 30% | 71% | Get this report |
| Ferrochrome | Ferrochrome:135 MT Per Day | ₹404 crore | 10% | 46% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Ferrochrome project report: frequently asked questions
How much does it cost to set up a ferrochrome plant in India?
Our sample report models an 11 MT per day plant at a total project cost of ₹1,182 lakh. That includes ₹545 lakh of plant and machinery and ₹106.78 lakh of working capital margin. Plants with larger furnaces, ore sintering or a dedicated power line cost several times more. Your project report prices the furnace size, site and power supply you actually plan.
What raw materials are used to make ferrochrome?
Chrome ore is the main input, reduced with metallurgical coke and other carbon reductants, with quartzite as a flux and electrode paste consumed by the furnace. Power is treated as a direct input too. In our sample report, chrome ore is 48% and smelting power 30% of raw material cost in Year 3.
How much electricity does a ferrochrome plant need?
A lot. The Indian Bureau of Mines estimates about 4,500 kWh of power for each tonne of ferrochrome, which makes power the second largest cost after chrome ore. The actual figure depends on ore grade, how fines are agglomerated and furnace design. Your report should use your own furnace data and the tariff in your sanctioned power contract.
What is the difference between high carbon and low carbon ferrochrome?
High carbon ferrochrome carries about 6–8% carbon and is smelted directly from chrome ore with coke. Low carbon ferrochrome has well under 1% carbon and is made in a separate refining step, often using silicon as the reductant. Stainless steel mills buy mainly the high carbon grade; low carbon grades serve special steels.
Is a ferrochrome plant profitable?
In our illustrative sample, the 11 MT per day plant earns a 16% return on investment in Year 3. It breaks even at 44% of capacity and pays back in about 4.2 years, with an average DSCR of 1.52. Real profit depends on ore cost, power tariff, chromium recovery and stainless steel prices, which can swing sharply.
Is BIS certification compulsory for ferrochrome?
Yes. Ferrochromium to IS 1170 is covered by the Steel and Steel Products Quality Control Order, and the BIS standards portal shows mandatory certification in force from 8 November 2024. A producer selling in India needs a BIS licence for the grades it makes, so the report should include testing and certification in the plan.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own furnace size, location and power tariff.
Sources and references
- Indian Minerals Yearbook 2022, Chromite (61st edition)Indian Bureau of Mines, Ministry of Mines, checked Oct 2026
- IS 1170: Ferrochromium, Specification (standard details and QCO status)Bureau of Indian Standards, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.