You are here: Home » Companies » News
Business Standard

JSW targets 20-22% growth in crude steel output in 2012-13

Projection more than guidance pins hope on additional Karnataka mines restarting ops

Mahesh Kulkarni  |  Bangalore 

JSW Steel plans to raise crude steel production 20-22 per cent to about 9 million tonnes (mt) during 2012-13. The planned production is higher than its guidance for the year.

The company is keenly awaiting the resumption of mining in Karnataka in select category A and B mines in the next couple of months.

For the year ended March 31, JSW Steel recorded steel production of 7.43 mt and 7.82 mt of sales, against a revised guidance of 7.5 mt and 7.8 mt, respectively. The company has set a guidance of producing 8.5 mt and selling 9 mt of steel in 2012-13.

  FY12 FY11 Change (%)
Steel production# 7.43 6.43 16
Net sales 32,060 23,125 39
Net profit 1,626 2,011 -19
Net debt 12,771 13,504* -5.4
Debt:equity ratio 0.69 0.75  
Interest cost 1,186 854 39
* Net debt as on December 2011   # In million tonnes
Source: Company website

“We have iron ore stocks for the next two months. The central empowered committee (CEC) has cleared three mining under category A mines to restart mining. We hope these would be operational by the end of July. We also hope the court would allow many more mines to restart mining in subsequent months. We expect at least 20-25 mt of iron ore coming to the market by the end of December,” said director and chief executive Vinod Nowal.

In addition to the auctioned ore, the company is also banking on about 1 mt of ore NMDC is producing every month, which is routed through auctions. The company hopes to record steel production of about 4.2 mt in the first six months of the year, with the second half (when the supply improves) accounting for the rest.

Based on the recommendations of the Indian Council of Forestry Research and Education, entrusted with preparing reclamation and rehabilitation plans for mining companies, the CEC has allowed five mines to restart operations in Karnataka.

At present, JSW Steel operates a 10 million tonnes per annum (mtpa) steel plant at Toranagallu in Bellary district, a 1 mtpa steel plant in Salem and 0.9 mtpa plants at Vasind and Tarapur. The company is expanding capacity at the Toranagallu plant to 12 mtpa. It has been buying iron ore via e-auctions in Karnataka through the last one year.

“So far, through e-auctions, we have purchased 14 mt of iron ore. Of this, we have received 11 mt. We have tried to bring ore from Chhattisgarh, but there is a logistics problem and the cost is very high. The auctioned ore is also expensive, costing Rs 3,000 per tonne for 60-61 per cent Fe ore. Compared to FOB prices in China, this price is at least higher by Rs 1,200-1,400 per tonne, owing to the shortage of ore,” Nowal told Business Standard.

Meanwhile, as stocks of high-grade ore have been exhausted at the e-auctions in Karnataka, the company is forced to buy low-grade iron ore. “Currently, we are getting low-grade ore with high content of alumina and MnO (manganese oxide), which is affecting production. We are putting a lot of effort and somehow managing, as we have very good technology to enrich low-grade ore of up to 56 per cent Fe grade to a grade of 63 per cent, and use it in our furnaces,” Nowal said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, June 28 2012. 00:11 IST