JSW Steel aims to grow iron ore pro­duc­tion

Business Standard - - COMPANIES - PROMIT MUKHER­JEE

JSW Steel Ltd, In­dia’s big­gest lo­cal steel­maker, aims to be pro­duc­ing 80 per cent of the iron ore needed for its flag­ship plant in south In­dia in three years time as it seeks to cut costs, a se­nior ex­ec­u­tive said.

The com­pany ex­pects to be­gin pro­duc­ing ore from mines it won in a re­cent auc­tion in the south­ern state of Kar­nataka by March next year, at an an­nual run rate of 4.7 mil­lion tonnes, deputy man­ag­ing di­rec­tor Vinod Nowal said, adding that it was also plan­ning to bid for more mines in an up­com­ing auc­tion.

“A higher de­gree of re­liance on our own mines will help in long-term cost sav­ings,” he told Reuters.

Iron ore ac­counts for the big­gest sin­gle cost in steel­mak­ing, giv­ing com­pa­nies with their own mines an ad­van­tage over ri­vals. While JSW Steel’s two big­gest lo­cal ri­vals, Steel Au­thor­ity of In­dia Ltd (SAIL) and Tata Steel, al­ready have their own mines, JSW’s Vi­jayana­gar plant in Kar­nataka has an an­nual steel­mak­ing ca­pac­ity of 12 mil­lion tonnes and needs 22 mil­lion tonnes of iron ore a year.

In July JSW won the rights to op­er­ate five mines in Kar­nataka which were re­opened un­der a stricter reg­u­la­tory regime, the coun­try’s top court hav­ing closed them in 2011 due to en­vi­ron­men­tal con­cerns, and more mines are be­ing put up for auc­tion in Novem­ber.

Nowal said the com­pany aimed to more than triple an­nual pro­duc­tion from its own mines in three years with out­put to also be boosted by the other mines that the com­pany plans to bid for.

The com­pany ex­pects to be­gin pro­duc­ing ore from mines it won in a re­cent auc­tion in Kar­nataka by next March, at an an­nual run rate of 4.7 mil­lion tonnes

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