JSW Steel lines up Rs 800 crore plant

JSW Steel, the country's fourth largest steel manufacturer, will invest about Rs 800 crore in iron ore beneficiation project, which would be undertaken at the company's existing plant in Karnataka.

The company is currently in talks with some mining companies in the state for procurement of low-grade iron ore, which would be converted into high grade upon processing.

The residual high-grade iron ore, which will have a high Fe content, will then be used for producing steel.

Accordingly through this method, the company is aiming to achieve advantages of cost reduction in procurement of raw materials.

JSW will buy about 17 million tonnes per annum of low-grade, low-cost iron ore from neighbouring mines in Karnataka for its plant based in Vijaynagar.

Sheshagiri Rao, CFO, JSW Steel, said, "We are looking to bring down our costs by upgrading the iron ore procured from the surrounding mines in Karnataka, which will then be sent for further processing. For this initiative, the company is investing about Rs 800 crore."

The costs borne by the company for this project will not be a part of the Rs 17,000 crore expansion drive currently undertaken by the company.

In addition, the company is also actively looking at acquiring four more service centres across Europe, which will be used as a processing centre to convert semi-finished goods to the end products. In May this year, the company had acquired the UK-based steel processing company, Argent, for Rs 31 crore.

Sajjan Jindal, VC and MD, JSW Steel, said, "We are currently looking at acquiring at least four more steel processing centres in Europe, which will be similar to the recent acquisition made in the UK."