Facing deficit of Iron ore to run its Vijaynagar plant at full-capacity, JSW expressed that it may take part in the e-auctions and bid for Goa’s Iron ore of about 11.48 MnT. Supreme Court has recently allowed for the e-auction of the same.
According to the company’s Joint MD and CFO Seshagiri Rao, Earlier, Goa’s Iron ore was not used by domestic industry. But today, there is lot of capacity coming up in India. In Karnataka, even low grade ores, such as 45-50, were used. Therefore, it is possible to use low grade Iron ore including Goa’s Iron ore by the domestic industry. He also said that the company will bid on prices based on grade and landed cost.
Goa’s Iron ore are of low grade and used for export as the domestic Steel industries have no such modern technology to use it for producing Steel. Instead, they use lumps which are of much better quality for the purpose of Steel manufacturing.
The company was operating its Vijaynagar-based plant at around 80-85 per cent of its overall annual production capacity. This rate could result in producing around 12 MnT during FY14. They are on the track to achieve the set target. During first half of the current year, it had produced around 5.85 MnT Steel. It has also expanded the plant’s capacity to 10 MnT pa which is not started yet owing to the lack of raw material.
The company has stopped the expansion of the project as the shortage of raw material will affect the growth rate of production. To increase the production capacity to 100 per cent continuous supply of raw material is required..
At present only 14 Iron ore mines are being operated. There are more mines which have not begun mining yet which is resulting in a trouble for the Steel industry’s requirement for the material.
According to Rao, Steel prices are unlikely to increase as even the international prices are stable currently. However, Steel price revision is to be conducted by steel industries in first week of every month. Next month’s price is likely to be announced by 1 Dec, 2013.