JSW Steel has recently executed the definitive agreement to acquire 49% stake in Odisha based pellet making firm – Brahmani River Pellets (BRPL) via JSW Techno Project Management owned by JSW Steel Group.
The pellet maker -BRPL, is owned by Aryan Mining and Trading Corp Pvt. Ltd, a joint venture between British mineral trading company Stemcor and Calcutta-based Saraf Group. While the overseas partner owns 73%, the Indian promoter holds the remaining 27%.
BRPL owns a 4 MnT pellet plant in Jajpur and a 4.7 MnT iron ore beatification plant in Barbil, both in Odisha. Besides, it has a 230 km slurry pipeline connecting the pellet unit to the beatification plant.
BRPL -a prominent pellet exporter – BRPL has remained one of the major pellet exporters from India. So far in FY18 (till Nov’17), BRPL has emerged as the 2nd largest pellet exporter after JSPL and has exported 1.15 MnT pellets, according to customs data maintained with SteelMint.
Earlier in Oct’17 Tata Steel reported cancellation of its acquisition deal of BRPL due to no clear regulatory approvals from the Reserve Bank of India, settlement of proceedings under FEMA (Foreign exchange management act.) by the directorate of enforcement and approval from the income tax authority.
How will this impact iron ore sourcing pattern of JSW Steel ?
JSW Steel has two pellet plants. One of around 9.2 MnT p.a. capacity in Karnataka and 4 MnT p.a.in Maharashtra. And its steel plants located in Vijayanagar (Karnataka), Dolvi (Maharshtra) and Salem (Tamil Nadu).
Presently, JSW Steel is sourcing, iron ore from Odisha merchant miners, Jharkhand merchant miners, Karnataka e-auctions, NMDC (C.G.) apart from imports. The steel maker is the biggest buyer of iron ore in Karnataka e-auctions.
So far in FY18, (Apr-Nov’17) JSW Steel sourced 20.9 MnT iron ore and its crude steel output was recorded at 10.57 MnT in the same time frame.
If the BRPL deal gets executed then probably, the steel maker may increase its pellet movement from Odisha to its steel plants instead of current pattern wherein it is sourcing iron ore fines from Odisha and Jharkhand mines.
JSW Steel’s upcoming Odisha steel project to be benefited –
JSW Steel has got the approval for a 10 MnT plant in Odisha proposed originally. In a revised application, it sought to enhance capacity to 12 MTPA. In parallel, another group firm JSW Infrastructure has secured clearances to install the slurry pipeline.
BRPL’s acquisition will become an easier source of raw material for its upcoming steel plant.
Leave a Reply