With an installed capacity of 18 mn t per annum, India’s leading integrated steel producer JSW Ltd. has recorded total iron ore receipts at 21.31 mn t in the Apr-Dec’20 period, SteelMint data shows. The figure excludes the sourcing figures from its Gonua and Narayanposhi mines in Odisha.
Somewhat plugging the gap in its backward integration, JSW commenced operations at all its captive mines in Odisha and Karnataka in CY20 that constituted about 49% of its total iron ore sourcing, the steel-maker divulged at its Q3 FY21 earnings call recently.
Volumes surge in Karnataka, Odisha
From its four iron ore mines in Odisha, which the steel major bagged at the minerals auctions in early 2020, JSW produced 9.33 mn t from Jun’20 to Dec’20. From the 9 ‘C’ category mines in Karnataka that the company won at successive auctions since 2016, total production in Apr-Dec’20 stood at 3.85 mn t. The last of the mines in Karnataka was operationalised in Q3 FY21.
JSW’s crude steel production in Apr-Dec’20 was 10.89 mn t and company officials recently informed that 95% of the production guidance of 16 mn t would be possible to achieve, given the iron ore shortfall in Q1 FY21. The company produced 16.10 mn t of crude steel in FY20.
The company’s flagship 12 mn t per annum steel plant at Vijaynagar in Karnataka sourced 3.85 mn t of iron ore from its 9 captive mines in the state in Apr-Dec’20. However, complete self-reliance still seems to be a far cry as the steel-maker purchased 11.38 mn t of iron ore during the said period for its Vijaynagar plant at monthly e-auctions in Karnataka. The 1 mn t/per annum Salem Steel Plant in Tamil Nadu – India’s largest special steels manufacturing facility – sourced 0.53 mn t from the captive mines in the state.
Likewise, the Vijaynagar plant obtained 0.19 mn t of iron ore from Odisha, of which 0.09 mn t was from JSW’s captive mines in the state, while the rest 0.10 mn t was sourced from merchant miners Sarda and Indrani Patnaik. According to SteelMint data, the 5 mn t per annum Dolvi Steel Plant in Maharashtra purchased 2.16 mn t of iron ore from Odisha merchant miners in the first three quarters of FY21.
Incidentally, JSW Ispat Special Products Ltd. (formerly Monnet Ispat & Energy) in Chhattisgarh sourced 1.31 mn t of iron ore in Apr-Dec’20, of which 0.42 mn t was supplied from JSW’s captive mines in Odisha, while the rest came from the merchant miners in the state.
In Chhattisgarh JSW sourced 1.77 mn t from PSU mining major NMDC during the period under review, with the entire quantity being channeled to the Dolvi plant, which, in addition, imported 0.08 mn t of iron ore to fulfill its raw material requirements.
Capacity addition to boost captive production
SteelMint has come to learn that the majority of operations for the proposed expansion project at the Dolvi plant from 5 mn t to 10 mn t per annum will be commissioned in Q4 FY21, while integrated operations will commence in Q1 FY22. The commissioning was held up due to technical glitches at the melt shop amid absence of foreign experts due to travel and visa restrictions following the Covid-19 outbreak.
Increased iron ore requirement in the coming days has led to JSW planning to enhance production from three captive mines in Odisha. Company officials informed SteelMint recently that while the Narayanaposhi mine will be expanded to 10 mn t per annum from the present 6 mn t/year, the Gonua mine will be expanded to 3.9 mn t per annum compared to the present EC limit of 1.2 mn t.
However, the Nuagaon mine is slated to undergo a mammoth capacity expansion to 20 mn t/year from the current 5.62 mn t. Provided the grades and mineral reserves tick all the right boxes, SteelMint expects the steel major to keenly participate at the upcoming auctions of virgin iron ore blocks in Odisha. JSW has a production target of 13.5 mn t of iron ore from its captive mines in Odisha in FY21.
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