The shortage of iron ore, a vital input for steel production has hit steel makers hard and JSW Steel, a leading player, plans to apply for steel mines in Karnataka when they come up for auction.
Due to the clampdown by the Supreme Court on mining in Odisha and restrictions on iron ore mining in Karnataka and Goa, availability has constrained availability leading companies like JSW Steel to resort to imports.
Vinod Nowal, deputy managing director, JSW Steel, told this correspondent that the company has filed 15 applications for fresh mines in Karnataka.
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Besides, around 51 category C mines in Karnataka are to be auctioned in the future.
JSW Steel’s 10 million tonne plant at Vijayanagar, operated at 85 per cent utilisation in 2014 due to iron ore shortage.
The company earlier said that it would import 6 million tonnes of iron ore in fiscal 2014-15, imported around half a million tonnes per month.
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It imported its first iron ore shipment of 170,000 tonnes from South Africa and three more shipments are expected soon. It also imports iron ore from Canada.
Totally, Karnataka’s mines can supply 40-50 million tonnes of iron ore, Mr. Nowal said, adding that JSW Steel hoped to source 50-60 per cent of its requirement of iron ore from captive mines in future.
He said the process for allotment of mines and commencement of production is expected to take at least two years.
Industry figures show that owing to the drop in domestic production of iron ore, the steel industry’s capacity utilisation was at 77 per cent in 2013-14. JSW Steel said India’s iron ore production fell from a level of 218 million tonnes in FY10 to 144 million tonnes in FY14 and is expected to drop further to 100 million tonnes in FY15 against a demand of 140 million tonnes.