JSW hikes output at Vijayanagar unit to 35-40% of capacity

JSW Steel has 'slightly' increased production levels from its 10 million tonnes per annum Vijayanagar steel plant in Karnataka to 35-40% of capacity after the company secured over 1.8 million tonnes of iron ore through a recent auction of the raw material.

"The situation has improved slightly... We are currently producing at about 35-40% of total capacity. One blast furnace and one Corex unit is operational. If iron ore movement improves, our production will also improve," a senior company official said.

Late last month, the company had gone for a massive 70% cut in production to 30% of installed capacity due to acute iron ore shortages.

"There are big issues related to the delivery of the auctioned iron ore, due to which we are not able to raise our production to a big extent," the official further said, adding that "delivery of the ore (to us) has been less than one lakh tonnes despite JSW buying over 1.8 million tonnes in the auctions".

Citing logistics and delivery-related issues, the official refused to provide a timeframe for the company to resume 100% production levels from the plant.

"Yes, now we can run our plant at  100% capacity as and when the raw material reaches to Vijayanagar, or at 80% capacity and keep some of it as inventory... But I can not give you a timeline right now," the official said.

JSW requires about 1.65 million tonnes of iron ore, having 62% Fe content, to run the Vijayanagar plant at full capacity, while about 3.34 million tonnes of iron ore has been auctioned since September.

Since August, steel and allied industries in Karnataka, including JSW, have been facing acute shortages of iron ore, following the imposition of a mining ban in the state by the apex court.

To resolve the crisis, the Supreme Court had allowed the e-auction of 1.5 million tonnes of iron ore per month out of stocks lying idle at various mines in the state.

However, the iron ore supply crisis at JSW deepened late last month, when its long-term supplier NMDC stopped supply of the raw material.

The state-owned company was adhering to the apex court order for selling all its ore from the state through the e-auction route only.

Explaining the supply-related bottlenecks, the official said that only nine delivery points have been opened so far and all the companies that secured ore supplies through the auction have to queue up there.

Besides this, trucks can only travel on roadways for 12 hours, between 6 am and 6 pm.