JSW Steel cuts Vijayanagar production by up to 40%

JSW Steel on Tuesday said it has cutits productions from its Vijayanagar plant in Karnataka's Bellary district by35 to 40 per cent due to paucity of iron ore, a key steel making raw material.

"We have reduced our steel production from Vijayanagarby about 35-40 per cent as we don't have much iron ore inventory left,"Sajjan Jindal-led JSW Steel's Joint Managing Director MVS Seshagiri Rao said.

When asked whether the plant was moving towards shutdown,Rao said, "The company has hardly two-three days of iron ore left,"but he refused to elaborate.

Last Friday, the Supreme Court ordered suspension of alliron ore mining operations in the Bellaryregion on environmental degradation in the area.

JSW Steel has 10.3 million tonnes per annum steel makingcapacity at Vijayanagar in Bellary of Karnataka and it sources about 50 percent of its iron ore requirements from Bellary,while another 30 per cent is met from Chitradurga district of the state.

Meanwhile, Karnataka Iron and Steel Manufacturers'Association on Tuesday gave a representation to Steel Minister Beni PrasadVerma stating that the suspension of the mining operation at Bellary would lead to closure of operationsof the steel and allied sectors in the region as they have no iron ore left.

Moreover, in a separate statement, Bangalore Chambers ofCommerce and Industry said the suspension on iron ore mining could adverselyimpact the country's Gross Domestic Product by 0.5 per cent amounting to $8.5billion.

"Karnataka-based iron and steel companies areapproaching a critical stage of closure of their manufacturing activities inthe next 2-3 days following the Supreme Court pronouncement last Friday haltingiron ore mining activities in the Bellaryregion," it added.

Karnataka produces 16 million tonnes iron and steel in ayear, which is a little less than 25 per cent of the country's totalproduction.

The state also produces more than a fifth of India's totaliron ore production, which is around 220 million tonnes annually. Of this,about 80 per cent comes from Bellary-Hospet region.

 

Half of this production from Bellary-Hospet region isconsumed within the state, including steel plants of JSW Steel, Kalyani Steeland Mukund Steel.