Prakash Industries Limited – an integrated steel & power making unit informed via press release that it is expected to start operations at its Sirkagattu iron ore mine by next month. The company is working to achieve the necessary clearances for the mines with successful Stage I approval for diversion of revenue forest land from Ministry of Enviornment, Forest & Climate Change. The Odisha govt. had executed the mining lease which has geological reserves of around 9.9 MnT in Jan’17.
The operation initiation at the Sirkagutta mine is expected to bring enhanced profits for the company owing to reduced dependence on external sources for iron ore.
Prakash Industries may lower its merchant iron ore sourcing
According to iron ore movement data maintained with SteelMint, in FY’18, Prakash Industries sourced around 0.94 MnT iron ore from Odisha merchant mines primarily – Indrani Patnaik, Rungta Mines and Essel Mining. It also procured 0.02 MnT iron ore from NMDC (C.G.). After the steelmaker commences operations at its captive mine, it may lower its sourcing from merchant mines.
The iron ore prices in Odisha is witnessed increasing as is evident from increase in prices by merchant miners such as Rungta Mines, KJS Ahluwalia, Serajuddin and Kaypee Enterprises w.e.f 2nd July’18. Amidst increasing prices by miners owing to logistics and royalty issues, the start of Sirkagutta iron ore mine is expected to leverage increased benefits to Prakash Industries.
Steel and sponge iron expansion plans of Prakash Industries
The steelmaker is planning to expand integrated steel plant capacity from 1.20 MnT pa to 3 MnT pa over the next 5 years through internal accruals at its existing location in Champa, Chhattisgarh.
The company is planning to increase its capacity of sponge making by 0.20 MnT p.a. in Sept’18 and 0.2 MnT p.a. till Mar’19.
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