Key Numbers
• Project Type: Greenfield Refractory Recycling Plant
• Location: Odisha, India
• RHI Magnesita Stake: 51%
• Khemka Refractories Stake: 49%
• Expected Commissioning Process: Transaction to close in Q3 2026
• Primary Focus: Recovery, Processing and Recycling of Used Refractory Materials
Market Analysis
Recycling Moves to the Centre of India's Steel Supply Chain
India's refractory industry is taking a significant step towards circular manufacturing with RHI Magnesita India and Khemka Refractories announcing a joint venture to establish a greenfield refractory recycling facility in Odisha. Strategically located close to the country's largest steel-producing belt, the facility will focus on collecting, processing and reusing spent refractory materials generated by steel plants and other high-temperature industries. The project is more than a recycling initiative—it reflects the changing priorities of India's steel ecosystem, where sustainability, raw material security and cost optimisation are becoming as important as production capacity.
The new company will be owned 51 percent by RHI Magnesita India and 49 percent by Khemka Refractories. Combining RHI Magnesita's global expertise in refractory recycling with Khemka's regional network and processing capabilities, the venture aims to create an integrated recycling supply chain for the Indian market. The transaction is expected to close during the third quarter of 2026, subject to customary approvals.
Why Refractories Matter to the Steel Industry
Refractories rarely receive the same attention as iron ore, coal or ferro alloys, yet they are among the most critical consumables in steelmaking. Every blast furnace, basic oxygen furnace, electric arc furnace, ladle, tundish and reheating furnace depends on refractory linings capable of withstanding temperatures exceeding 1,200°C. These linings gradually wear out during production and require periodic replacement, generating significant quantities of used refractory material.
Traditionally, much of this spent material has been discarded despite containing valuable minerals such as magnesia and alumina. Modern recycling technologies now allow these materials to be recovered, processed and reused in the manufacture of new refractory products. This reduces dependence on virgin minerals while improving resource efficiency and lowering waste generation across the steel value chain.
Raw Material Security Is Becoming a Strategic Priority
The timing of this investment is particularly significant. Global supply chains for refractory raw materials have experienced repeated disruptions in recent years because of geopolitical tensions, mining constraints and freight volatility. Manufacturers are therefore increasingly looking for alternative sources of secondary raw materials to reduce dependence on imports and improve supply chain resilience.
For India, which is rapidly expanding steelmaking capacity, ensuring uninterrupted availability of refractory materials will become increasingly important. Every new blast furnace or electric arc furnace increases demand for high-performance refractory products. Recycling provides an opportunity to supplement primary raw material supplies while improving long-term procurement security for manufacturers.
Odisha Emerges as the Ideal Location
The choice of Odisha is strategically important. The state has emerged as India's largest steel investment destination, hosting major integrated steel plants operated by Tata Steel, JSW Steel, Jindal Steel & Power, AM/NS India and several other producers. Locating the recycling facility close to these customers reduces transportation costs for spent refractories while ensuring a consistent supply of recyclable material.
The project also aligns with the broader industrial development taking place across eastern India. As steel production continues to expand in Odisha, Jharkhand and Chhattisgarh, supporting industries such as refractories, mining, logistics and recycling are also witnessing increased investment. This integrated ecosystem will be essential for achieving India's long-term steel capacity targets.
Circular Economy Is Becoming a Competitive Advantage
The steel industry is increasingly under pressure to reduce its environmental footprint without compromising productivity. While decarbonisation discussions often focus on hydrogen, renewable energy and electric arc furnaces, circular manufacturing offers another important pathway towards sustainability. Recycling refractory materials reduces mining requirements, lowers landfill waste and decreases the carbon footprint associated with producing virgin refractory raw materials.
For steel producers, greater availability of recycled refractory materials can also improve cost competitiveness over the long term. As environmental regulations become more stringent and customers increasingly evaluate ESG performance, circular supply chains are expected to become a differentiating factor across industrial manufacturing.
Beyond Recycling: Building a More Sustainable Steel Ecosystem
The joint venture reflects a broader transformation taking place across India's metals sector. Recent investments have focused not only on expanding steel production but also on strengthening every component of the supply chain—from iron ore logistics and beneficiation to raw material recycling and digital manufacturing. These developments indicate that India's steel industry is preparing for sustainable long-term growth rather than capacity expansion alone.
The refractory recycling facility is another example of how upstream suppliers are adapting to the evolving needs of steelmakers. By integrating recycling into the refractory value chain, the project supports both economic efficiency and environmental responsibility, reinforcing India's transition towards a more resource-efficient industrial economy.
Industry Impact
The Odisha recycling facility represents an important milestone for India's refractory and steel industries. By recovering valuable materials that were previously discarded, the project strengthens raw material security, improves resource efficiency and supports the development of a circular manufacturing ecosystem. For steel producers, this could translate into more sustainable sourcing options and greater long-term supply stability.
The initiative also demonstrates how supporting industries are evolving alongside India's rapidly expanding steel sector. As capacity additions continue across the country, investments in recycling, logistics and value-added processing are expected to become increasingly common.
Outlook
India's steel industry is entering a phase where sustainability will be measured not only by emissions but also by resource efficiency. Recycling refractory materials addresses both challenges by reducing waste while lowering dependence on imported raw materials. Similar projects are likely to emerge as steelmakers and suppliers pursue circular manufacturing models.
The RHI Magnesita–Khemka partnership therefore represents more than a single recycling plant. It signals the direction in which India's industrial supply chain is moving—towards greater resilience, higher efficiency and a more sustainable future.