JSW Steel slots Rs 6,000 cr for mine buys, expansion

June 30, 2008

June 30th (Business Standard) – JSW Steel, a part of the $8-billion OP Jindal Group, is all set to invest Rs 6,000 crore in the current financial year to acquire iron ore mines in the American and African continents and increase existing capacity.

The company, which manufactures flat steel products like hot-rolled coils, cold-rolled coils, galvanised steel sheets and auto-grade steel, currently produces around 4.8 million tonnes of steel a year from its Vijayanagar plant in Karnataka and the Salem facility in Tamil Nadu.

“By the end of this year, the capacity at these two plants will increase to around 8 million tonnes and by 2010 to 10 million tonnes. We will shortly be setting up steel plants in West Bengal and Jharkhand and this will increase our production to 32 million tonnes by 2020,” said JSW Steel CEO Y Siva Sagar Rao at a press conference convened to announce the inauguration of the company’s two retail outlets in Bangalore.

Rao added that the company has secured financial commitments for the capital expenditure.

The company plans to start work on the steel plant in West Bengal in the next three months.

“We had some problems with regard to land acquisition, but that has been solved now and we have the land. We are in the process of tying up with a mine owner in Orissa and have alerted coal suppliers too. The first phase of the plant will be completed in 30 months,” Rao said.

The plant will initially produce 6 million tonnes of steel each year, which will subsequently touch 10 million tonnes. In Jharkhand too, the company is grappling with problems pertaining to land acquisition. The overall investment for these plants is Rs 40,000 crore each, he said.

Forecasting a sharp rise in the country’s steel consumption in the near future, Rao said the company is gearing up to meet the demand by ensuring steady supply of iron ore, the key raw-material, to its steel plants.

At present, per capita consumption of steel in the country is 47-50 kg as against the global average of 180 kg.

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