JSW Steel to commission Iron ore mining by 2009

Mumbai: To overcome the rise in raw material cost, JSW Steel has been scouting for more mine ores even as many of them will go on stream by end of 2009.

Iron ore mining in Chile would be commissioned by 2009, the company said, and added that the three mines allotted to it in Karnataka has 70-80 million tonnes (mt) iron ore capacity.

It has also received prospecting licence for an iron ore mine of 750 mt capacity in Jharkand.

Mr Sajjan Jindal, Vice-Chairman and Managing Director, said: “Acquiring mines in India is a time consuming process and requires a lot of effort.”

JSW Steel has tied up 100 per cent of its coal requirement of 5.7 mt for fiscal 2009 and entered into long-term contracts for coking coal at invest $305 a tonne.

For iron ore, the company is looking for long-term contracts and may have to buy 50 per cent of its requirement from spot.

Brownfield expansion of doubling Jindal Steel Vijayanagar to 6.8 mtpa is slated for completion in September (6 months ahead of schedule) and it will be further enhanced to 10 mtpa by March 2010.

For the financial year 2007-08, the company’s net profit stood higher by 34 per cent at Rs 1,728 crore (Rs 1,292 crore), while income was up 33 per cent at Rs 11,677 crore (Rs 8,700 crore).

JSW Steel plans to float a separate subsidiary to manufacture and sell pre-engineered building (PEBs) structures.

“PEBs are gaining momentum in India with more and more Indian corporates implementing large projects using PEBs due to the distinct advantage of saving construction time (of about 30-50 per cent) in total project schedule, better look and durability,” the company said in a Bombay Stock Exchange announcement.

Mr Jindal said: “With the Government imposing a 5 per cent duty on galvanised steel exports and 15 per cent on HR coils, our attempts would be to increase consumption of value added steel products in the country.”

The PEBs will consume steel plates, galvanised, colour-coated and galvalume products, thus giving a captive buyer for JSW Steel.

In addition, this will be an opportunity for JSW Steel to enter into high-end solutions using steel products as the base.