(FE)
Even as JSW Steel cut its capex guidance for FY20, the company is looking at bidding for a majority of the 20 iron ore mines in Odisha to secure raw material for its greenfield and brownfield projects. The company is also looking to bid for mines in Karnataka, where it has already secured nine iron-ore mines. Jayant Acharya, director, JSW Steel, said the company was bidding for mines given the 20 mtpa greenfield project in Odisha. “The mines in Odisha will primarily help the company secure the future raw material needs of the new plant in Odisha, but it will be taken to other plants as well to meet the requirement,” Acharya said.
SW Steel has undertaken steel capacity expansions at the Dolvi plant to 10 mtpa from 5 mtpa, and at Vijayanagar Works to 13 mtpa from 12 mtpa, which would increase the requirement of iron ore from current 32.4 mtpa to 43.2 mtpa. JSW steel meets around 8-9% of its total requirement from captive mines, while the rest is sourced from NMDC and other miners. In H1FY20, JSW Steel’s captive iron ore mines volume was around 2 million tonne and it is expected to cross 3 million tonne in H2FY20.
According to sources close to the development, the Odisha tender has a reserve price or premium requirement of 15-50% depending on the resources available at the mines. This would mean the miner will have to pay the government between 15-50% of the price per tonne of iron ore as premium. The cost of iron ore in Odisha ranges between Rs 2,000 per tonne to Rs 6,000 per tonne depending on the grade.
