The Vijayanagar steel plant, which accounts for 70% of JSW’s total steel production, is likely to shut down in three days as it runs out of raw material.
This follows a ban enforced by the Supreme Court on mining in Karnataka’s Bellary district, which produces 21% of the country’s iron ore.
More than half-a-dozen steel companies, producing 14 million tonne (mt) between them, have been hit by the ban.
“We have three days’ iron ore stock left in our inventory. We will have to see what can be done after that,” said Seshagiri Rao, joint MD and group CFO, JSW Steel.
JSW Steel procures iron ore from companies including NMDC, VMPL and MML.
Rao did not reveal if his company was trying to tie up for iron ore supplies from companies that source the raw material from other states.
At least 50% of the 16.5 mt iron ore required by the Vijaynagar plant comes from mines in Bellary, said sources. Of the rest, 30% is sourced from Chitradurga district and 20% from outside Karnataka.
The 10 mt steel plant has so far taken an investment of `33,500 crore.
JSW, meanwhile, refuted allegations of illegal mining made by the Lok Ayukta in its report.
Among other things, the report alleges that iron ore was transported illegally from a stockyard located near its premises and run by Sri Swastik Nagaraj and Karapudi Mahesh and their associates.
The Sajjan Jindal-led group is also alleged to have paid money to former Karnataka chief minister BS Yeddyurappa’s family members for a land transaction in return for pushing the company’s case with the central government for acquiring new licences.
The payment was compensation paid for modifying a memorandum of understanding between itself and the state-owned Mysore Minerals Ltd for mining iron ore from the Thimmappana Gudi mine in Bellary.
The Lok Ayukta’s report accuses the state of other malpractices leading to a loss of Rs16,000 crore. Adani Enterprises, NMDC Ltd, and Sesa Goa are the other companies named in the report for wrongdoing.
JSW denied the allegations in a strongly worded press release.
The stockyard from which the iron ore is alleged to have been transported to different destinations is neither owned nor controlled in any manner by JSW Steel, it said.
“Similarly, when JSW Steel is not in the business of iron ore export and has not shipped any iron ore to Krishnapatnam Port or any other port, its name is unnecessarily included with the other names transporting ore from various loading points to Krishnapatnam Port, thereby putting it in disrepute.”
“JSW Steel is appalled and concerned with the untenable conclusions drawn in the Lokayukta report based on speculative inferences being drawn against JSW Steel without giving adequate opportunity to the company to present its view point with complete facts,” said Rao.
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