Tata Steel not worried about ore reserves

Jamshedpur will be adding another million tonnes of capacity a year

Tata Steel has iron ore reserves to cater to its Jamshedpur and Kalinganagar (Odisha) plants till only 2030.
 
However, the company says, it is not perturbed. 
 
Rajiv Kumar, vice-president of plant operations at Kalinganagar (Jajpur district), says within 30-170 km of the place,, there are many mines. “So, post-2030, if we don’t have mining, so be it. We are confident that we will be able to manage and chart our growth.”
 

Tata Steel’s iron ore units are at Noamundi, Joda and Katamandi in Jharkhand, and in Odisha. On the other key raw material, coking coal, Kalinganagar imported all its requirements last year. “It will continue like that,” said Kumar. Iron ore and coking coal together account for 75-80 per cent of the input cost for steel.

 
The West Bokaro division fulfills Tata Steel’s coking coal requirement but is used for the Jamshedpur plant. “West Bokaro is closer to Jamshedpur and Kaliganagar is closer to the ports; that’s how it has been designed. So, Kalinganagar is dependent on imported coal. Excepting for iron ore, we are buying from the market,” said Kumar.
 
That’s not stopping Jamshedpur and Kaliganagar from growth plans. Jamshedpur will be adding another million tonnes (mt) of capacity a year. As for Kalinganagar, Kumar says, “With the confidence that the board (of directors) has got from the performance, they are looking at it very actively. Half the work for the second phase has been enabled, not in terms of technological equipment but the roofing, sheeting, utilities and all the concrete and civil work is in place.” There is a plan to add three mt a year of capacity in the second phase, taking the total to six mt at Kalinganagar. Kumar didn’t want to elaborate but it is possible to ramp up capacity at Kalinganagar to 18 mt, as it has 3,400 acres.

 
T V Narendran, managing director, Tata Steel India and Southeast Asia, had earlier told this newspaper that raw material linkages do help but the advantage is limited when raw material prices are low and the taxes on captive raw materials are high, as in India.
 
JSW Steel, the country’s largest producer in the segment at 18 mt a year, has managed so far with no captive iron ore mines. The company has won some in Karnataka through auction but none are operational. Tata Steel is yet to bag any iron ore mine in an auction. “Obviously, it is not making sense for us (to bid that high),” is all Kumar says.

 
Kaliganagar is operating at full capacity. “We have been able to grow faster than we had anticipated because we were on the runway. Now, we have taken off and now want to take it to the next level. That is where we are looking to the board for some additional inputs,” said Kumar.