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Hit by mining ban, JSW Steel to import 5 mt iron ore to run plants

Facing iron ore shortages for more than 18 months, JSW Steel on Thursday said it plans to import 5 million tonnes (mt) of the raw material to operate plants in Salem, Tamil Nadu, and Dolvi, near Mumbai.

Country's leading steelmaker, which has already received some parcels, has plans to import about 5 mt iron ore annually to meet the requirements of the two plants till the crisis continues, company's Director and CEO Vinod Nowal said here.

The company is sourcing the ore from Australia and South American countries and has already received some parcels at Tuticorin port and JNPT, Mumbai, he added.

The plants, with a combined capacity of 4.3 million tonnes per annum (mtpa), account for about 30 per cent of JSW's total capacity at 14.3 mtpa.

Salem (1 mtpa) unit is using Tuticorin port in Tamil Nadu for imports, while Dolvi (3.3 mtpa) is sourcing through JNPT, Mumbai. Overall, the company needs about 23 mt of iron ore annually to produce steel at its optimum capacity.

'We are importing for Salem plant as well as JSW Ispat's Dolvi plant. They are very close to ports, so they have moved to import basis actually,' he told reporters here on the sidelines of a conference organised by OreTeam.

He added: 'We are sourcing almost 80 per cent of the requirements. It is about 5 mt but depends on cargo available, depends on (iron ore availability in) Odisha-Jharkhand, they are so many combinations.'

Like other steel firms in Karnataka, JSW has been facing iron ore shortages for more than a year and half now due to restricted supply of the ore in the state, where the apex court had put a mining ban in July-August 2011. Companies such as Essar Steel have also opted for some imports to keep the plants going. India has enough iron ore reserves and steel firms seldom needed to go in for its imports before the ban and various probes into illegal mining that began to hurt the supplies of the raw material.

The company, which does not have a captive iron ore mine to feed its plants, was buying the raw material from Karnataka only for all its plants. However, it has now shifted to imports for Salem and Dolvi units which are closer to ports.

'Both the units were buying the iron ore from Karnataka.

After this problem (iron ore shortages), we have taken the decision (to import)... It (imports) also depends on many combinations like availability in Jharkhand and Odisha, logistics cost, landed cost of imports,' Nowal said.

Talking about iron ore availability in Karnataka, he said that only 8 category-A mines have become operational and raw material availability is about 13-15 mt currently.

Opening of Category-B mines would release another 8 mt, he said, adding that 'we are very much hopeful that there will be some decision next month (in this regard by the Supreme Court). Our request is that the Supreme Court should take some faster decision on that.'
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