Mumbai: India’s No.3 steelmaker JSW Steel said on Monday it plans to raise production at its plant in Karnataka state after the Supreme Court partially lifted an iron ore mining ban imposed in a key region of the state.
It now plans to operate its plants in south India at about 80% capacity. It had cut production at its Karnataka plant by 30 to 35% last week after the court had imposed an interim ban on mining in Bellary, from where it sources most of its ore requirement for the 10 million tonne plant.
The Mumbai-based steelmaker has a capacity of 11 million tonnes per annum (MTPA), with plants in Karnataka and Tamil Nadu state, and requires 18 MTPA of iron ore to operate them at full capacity, it said.
“JSW Steel plans to operate its plants at present at around 80% capacity; with an expectation of further relief in the availability of ore from the Honorable Supreme Court of India to enhance the capacity utilization beyond 80 percent,” it said in a statement.
On Friday, Supreme Court allowed state-run miner NMDC to mine up to 1 million tonnes per month of the steel-making ingredient from 6 August in Bellary.
State-run NMDC mines about 6 million tonnes of iron ore annually from the region.
On 29 July, the court had imposed an interim ban on mining activities in the region, citing environmental degradation.
The iron ore mined by NMDC will be sold to domestic steelmakers in consultation with the ministry of steel, JSW said.
Shares of JSW Steel, in which Japan’s JFE Holdings owns 14.8%, have fallen about 39% since 29 July. The stock was also hit when it was named in allegations by an anti-graft watchdog of illegal iron ore purchase. The steelmaker has denied any wrongdoing.
Shares in the steelmaker, valued by the market at $3.5 billion, provisionally ended down 4.1% at Rs672.00 in a weak Mumbai market.