Mumbai: JSW Steel Ltd, India’s third-largest steel maker, cut production at its Vijayanagar factory to 30% of capacity after the Supreme Court limited iron ore sales in Karnataka to online auctions.
JSW Steel, which buys more than 80% of the raw material from NMDC Ltd and other miners in Karnataka, had to cut output last month as supplies dried up following an interim ban on iron ore mining in Bellary district by the Supreme Court.
The apex court in August allowed NMDC to restart mining operations in Karnataka, but ordered the state-run miner to release 1 million tonnes (mt) of iron ore every month to meet industrial needs. On 2 September, it directed the online auction of 1.5mt of ore from the existing stockpile for the same purpose.
The steel maker said that despite the court’s directive, the supply of the 1mt hasn’t been fulfilled even after a lapse of 50 days. The online auction had not given any relief as 31% of the auctioned material was not bought by any participants because of the inferior quality of the ore, it said.
“NMDC has only been able to increase its production in Karnataka to 600,000 tonnes per month from 500,000 tonnes, which is inadequate to meet the needs of the steel industry there,” Seshagiri Rao, joint managing director and group chief financial officer of JSW Steel said.