Home / Companies / JSPL may bid for ore mines in Odisha

Angul (Odisha): To ensure raw material supply to its plants, Jindal Steel and Power may bid for iron ore mines in Odisha in forthcoming auctions, which are scheduled to start in October-November this year.

The Naveen Jindal-led firm, which plans to expand the production capacity of its plant here from 2 million tonnes per annum (MTPA) to 6 MTPA by the end of next year, is battling raw material security at present.

“We may decide to go for auction when it happens in Odisha. We are evaluating at present. We will see whether we can buy iron ore from market or participate in auction as Odisha is one of the richest states in the country when it comes to availability of iron ore," a senior company official told the Press Trust of India.

The 12 mineral-producing states, including Odisha, will auction 82 mining blocks that contain minerals such as iron ore, bauxite, limestone by October-November this year.

The government passed a new law (MMDR Amendment Act, 2015) in March this year to pave way for auction of iron ore and non-coal mineral mines in states.

To secure raw material supply, JSPL is also exploring other options such as slurry pipelines for ore from Barbil and Paradip to Angul, an official said, adding that the two pipelines may cost a total 900 crore.

“The company is planning a slurry pipeline for the Angul Plant from Barbil for a total stretch of 202km which may cost about 600 crore. This is under evaluation stage," the official said, adding slurry pipeline, if finalised, will reduce the transportation cost significantly.

He said the company is confident that in another five to six months permanent solutions would be arrived at and decisions would be taken as management is considering various options.

The company is also considering a slurry pipeline for the company is also considering a slurry pipeline for imported iron ore transportation from Paradip to Angul as iron ore prices have crashed globally to $42-45 a tonne, the official said, adding the 180km pipeline, if finalised, may cost about 300 crore.

Citing example of high logistic costs on transportation of coal and iron ore, the official said, “The logistics cost is killing us. It is $4-5 per tonne of coal from Australia to India but from Paradip to Angul it is $10."

On coal, he said the company would depend on e-auction of coal from Coal India apart from other options. JSPL had reported a consolidated net loss of 339.26 crore for the April-June quarter owing to higher depreciation and finance costs.

Consolidated total income of the company declined to 4,426.32 crore in the quarter from 4,687.33 crore in the same period a year ago.

The company is working on a 1.4 MTPA Rebar mill in Angul, which is expected to be commissioned by March 2016.

It is also working on a 1.4 MTPA Rebar mill in Oman which is expected to be completed in Q4 2015-16. PTI

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout