Non-allotment of a captive mine on the one hand and the severe shortage of iron ore on the other may force JSW Steel to import iron ore to keep up its production schedule for the current fiscal.
“Due to severe shortage of ore, we were forced to import around seven million tonnes of iron ore from Canada and South Africa, among other countries, last year to maintain our production level. Now, we have stopped importing ore. We are hoping that things will improve with increased iron ore production and also that the State government will take steps to ease the crisis. If it does not happen, we may have to go for import of ore again this year,” Manjunath Prabhu, vice-president (administration), JSW steel, told presspersons here on Tuesday.
Against the requirement of around 17 million tonnes to produce around 10 million tonnes of steel a year, JSW Steel was able to get around 10 million tonnes to 13 million tonnes during the year 2014-15. Due to shortage of ore in the State, the company imported around seven million tonnes of ore to ensure that its production schedule was not affected, he said.
As a result, earning after tax was likely to come down owing to the increased production cost and a down trend in the market. “The cost of production per tonne of steel went up by Rs. 5,000 mainly due to the increase in the procurement cost of iron ore,” he said, adding that around 18 per cent of the 10 million tonnes of steel produced was being exported.
“We are awaiting the audit report to ascertain the profit,” he said.
To a question, he said that the facility for producing 12 million tonnes of steel per year was ready and would be put to use during the current year.
There were also plans to increase the production of steel to 16 million tonnes, making JSW Steel the largest steel producer in a single location in the country.
The Cold Rolling Mill – II, which is the first in the country to produce the State-of-the-art auto grade steel, was commissioned last year and had produced 2.08 tonnes of steel of which 0.67 tonnes was exported.
source: The Hindu
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