Two iron ore mines will start production in March: JSW Steel

28 November 2016

JSW Steel is poised for better times with steel prices going up and sourcing iron ore from captive mines becoming a reality though weak demand posing a major challenge. Demonetisation, which has come as bolt from the blue, is both a positive and negative for the industry. Seshagiri Rao, Joint Managing Director, JSW Steel got interviewed in a national daily and expressed his views on rising raw material costs.

We have bought five category ‘C’ iron ore mines in Karnataka. We will invest ₹150 crore this fiscal and another ₹100 crore in next fiscal. Of these five mines, two will be operational by March and rest by December next year.

We have also won Moitra coal mine in Jharkhand in the auction. It is supposed to be operational by 2019 as per the mining plan, but we intend to start production by 2018.

Since it is not an operating mine we have to take approvals, get forest clearances and acquire land.”

Steel companies margins are under pressure, with the unprecedented trebling of coking coal prices. The demand at present is weak.

In the first seven months of this financial year, India produced 5.5 million tonnes (mt) more of steel. So if you see GDP numbers, steel performed extremely well to register a 10 per cent growth.

Now, the question is who consumed the excess supply when demand was not robust. If you analyse the numbers, we replenished imports to an extent as it came down by 2.9 mt.

We exported 1 mt more as compared to last year. So, domestic demand actually went up by only 1.6 mt. In India, the annualised production is about 95 mt and the installed capacity is 125 mt.

Source – BL