JSW Steel to reduce import of iron ore from other states into Karnataka
Steel major JSW Steel is planning to reduce import of iron ore to its Karnataka facility as it starts new captive mines in the state. A price correction made by NMDC is another key factor. The development comes at a time when local miners have been alleging that JSW is not procuring enough from Karnataka, leading to pile-up of inventory.
Seshagiri Rao, JMD and Group CFO for JSW Steel said the company is procuring iron ores from other sources due to high premium and pricing in Karnataka. In the last few years, there has also been a production shortage.
Company’s 12 million tonne (MT) steel plant in Karnataka requires around 22 MT of iron ore. Total permitted iron ore production in the state is 35 MT, apart from category C mines. Earlier it used to be 30 MT.
Production in 2018-19 is estimated to be around 28-29 MT. While JSW’s requirement is 22 MT, other companies in the state together have a requirement of around 12-15 MT. This has led to a shortage in the last few years. While total requirement in Karnataka is 40 MT, there is shortage of supply of 10 MT.
Last year the production was 27 MT only, Rao said.
JSW plans to meet its iron ore requirement through new captive mines that have a total capacity of around 4.3 MT. The company had invested around Rs 3-4 billion in captive mines. Besides, the company is also planning to bid for new 7-8 mines, which will have total capacity of around 2.5 million.