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JSW hikes output at Vijayanagar unit to 35-40% of capacity

13 Oct 2011 Evaluate

JSW Steel has 'slightly' increased production levels from its 10 million tonnes per annum Vijayanagar steel plant in Karnataka to 35-40% of capacity after the company secured over 1.8 million tonnes of iron ore through a recent auction of the raw material. One blast furnace and one Corex unit is operational. If iron ore movement improves, its production will also improve. Late last month, the company had gone for a massive 70% cut in production to 30% of installed capacity due to acute iron ore shortages. There are big issues related to the delivery of the auctioned iron ore, due to which the company is not able to raise its production to a big extent. The delivery of the ore has been less than one lakh tonnes despite JSW buying over 1.8 million tonnes in the auctions.JSW requires about 1.65 million tonnes of iron ore, having 62% Fe content, to run the Vijayanagar plant at full capacity, while about 3.34 million tonnes of iron ore has been auctioned since September. Since August, steel and allied industries in Karnataka, including JSW, have been facing acute shortages of iron ore, following the imposition of a mining ban in the state by the apex court. To resolve the crisis, the Supreme Court had allowed the e-auction of 1.5 million tonnes of iron ore per month out of stocks lying idle at various mines in the state. However, the iron ore supply crisis at JSW deepened late last month, when its long-term supplier NMDC stopped supply of the raw material. The state-owned company was adhering to the apex court order for selling all its ore from the state through the e-auction route only.

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