Mahesh Kulkarni / Bangalore Nov 01, 2012,
Business Standard
JSW Steel, faced with a shortage of iron ore for its factory in Bellary, is working on a strategy to source adequate raw material. The company, operating its 11-million-tonne plant at around 80 per cent of the capacity, is likely to face a shortage of up to 25 per cent of its requirement during 2013-14.
“We expect both Category A and B mines (in the state, closed earlier by Supreme Court order) to resume mining in the next two to three months, with a combined production of about 12 million tonnes (mt). In addition, (government-owned) NMDC will add another eight mt. Of the total ore being sold through auctions, we are confident of buying 60-70 per cent,” said Vinod Nowal, director and chief executive officer.
The company requires about 16 mt ore of 63 per cent ferrous (Fe) grade for its Vijayanagar steel plant in Bellary. It hopes to procure about 12 mt through e-auctions in Karnataka, leaving a gap of about four mt. “We are planning to procure the balance quantity from other states like Odisha, Jharkhand and Chhattisgarh, depending on the availability. We are also exploring the option of using very low-grade (50 per cent Fe grade) ore from the dumps available in abundant quantity in Karnataka,” Nowal told Business Standard.
He said the company was also expecting the opening of Category-C mines during the next financial year. The SC had ordered cancellation of 49 Category-C mine leases as these were involved in large-scale illegal mining. It also recommended auctioning such leases for end-users.
At present, on approval of reclamation and rehabilitation (R & R) plans by the Court’s Central Empowered Committee, three mines in category-A (capacity of 1.4 mtpa) have restarted production. Another eight (capacity of 3.3 mtpa) are in various stages of approval and expected to commence production during the October-December quarter.
“We have no problem as far as ore is concerned for the current fiscal and we are confident of achieving 80 per cent of the capacity up to March 2013. As far as the next fiscal is concerned, we may have to think of an alternative arrangement,” said Nowal.
The company is preparing a strategy to source raw material for next year. It is also planning to make use of very low-grade ore. “We have technology to use low-grade iron ore with less than 50 per cent Fe grade in our blast furnace. Though the recovery of iron in such ore is limited, we can still make use of it. We have requested the authorities to put such ore on e-auction,” said Nowal. The SC-appointed monitoring committee has to take a decision in this regard, he added.
For the first six months of 2012-13, JSW produced 4.31 mt of crude steel, growth over a year of 26 per cent. It has projected nine mt production for the year ending March 2013.
The company, however, has ruled out the possibility of importing ore for the Bellary plant, as it is too far away from a port to be economically viable. However, it is importing ore for its Dolvi and Salem steel plants, as these are nearer to ports.
JSW has, of the total 33.3 mt of ore sold through e-auctions in Karnataka, purchased 19.8 mt in e-auctions and received 92 per cent of it till October 19, at an average price of Rs 3,000 a tonne.
Business Standard
JSW Steel, faced with a shortage of iron ore for its factory in Bellary, is working on a strategy to source adequate raw material. The company, operating its 11-million-tonne plant at around 80 per cent of the capacity, is likely to face a shortage of up to 25 per cent of its requirement during 2013-14.
“We expect both Category A and B mines (in the state, closed earlier by Supreme Court order) to resume mining in the next two to three months, with a combined production of about 12 million tonnes (mt). In addition, (government-owned) NMDC will add another eight mt. Of the total ore being sold through auctions, we are confident of buying 60-70 per cent,” said Vinod Nowal, director and chief executive officer.
The company requires about 16 mt ore of 63 per cent ferrous (Fe) grade for its Vijayanagar steel plant in Bellary. It hopes to procure about 12 mt through e-auctions in Karnataka, leaving a gap of about four mt. “We are planning to procure the balance quantity from other states like Odisha, Jharkhand and Chhattisgarh, depending on the availability. We are also exploring the option of using very low-grade (50 per cent Fe grade) ore from the dumps available in abundant quantity in Karnataka,” Nowal told Business Standard.
He said the company was also expecting the opening of Category-C mines during the next financial year. The SC had ordered cancellation of 49 Category-C mine leases as these were involved in large-scale illegal mining. It also recommended auctioning such leases for end-users.
At present, on approval of reclamation and rehabilitation (R & R) plans by the Court’s Central Empowered Committee, three mines in category-A (capacity of 1.4 mtpa) have restarted production. Another eight (capacity of 3.3 mtpa) are in various stages of approval and expected to commence production during the October-December quarter.
“We have no problem as far as ore is concerned for the current fiscal and we are confident of achieving 80 per cent of the capacity up to March 2013. As far as the next fiscal is concerned, we may have to think of an alternative arrangement,” said Nowal.
The company is preparing a strategy to source raw material for next year. It is also planning to make use of very low-grade ore. “We have technology to use low-grade iron ore with less than 50 per cent Fe grade in our blast furnace. Though the recovery of iron in such ore is limited, we can still make use of it. We have requested the authorities to put such ore on e-auction,” said Nowal. The SC-appointed monitoring committee has to take a decision in this regard, he added.
For the first six months of 2012-13, JSW produced 4.31 mt of crude steel, growth over a year of 26 per cent. It has projected nine mt production for the year ending March 2013.
The company, however, has ruled out the possibility of importing ore for the Bellary plant, as it is too far away from a port to be economically viable. However, it is importing ore for its Dolvi and Salem steel plants, as these are nearer to ports.
JSW has, of the total 33.3 mt of ore sold through e-auctions in Karnataka, purchased 19.8 mt in e-auctions and received 92 per cent of it till October 19, at an average price of Rs 3,000 a tonne.
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