JSW Steel looks at Goa ore for Vijayanagar

JSW Steel Ltd, the flagship company under the JSW Group, might now source iron ore from Goa to secure its raw material supply during a rainy day.

The company will soon start experimenting with the ore available from the mining tracts of Goa to see how much cost it incurs on beneficiating it and using it in its 10 million tonne steel making facility at Vijayanagar, in Karnataka.

“We have thought about the idea and are currently working on the cost benefits of using the iron ore from Goa,” said Jayant Acharya, director — commercial, JSW Steel.

The iron ore mined from Goa has traditionally been of low quality, with an approximate Fe content of and around 54%. As a result, this ore cannot be used in its original form for steel making in Indian plants.

But following the recent ban on mining of iron ore in Karnataka, JSW Steel has seen its raw material security shrink substantially, forcing it to operate at a capacity of as low as 40%.

Due to an abrupt ban on mining, our production had taken a hit and so we are looking at various ways of securing our raw material in future. And one of these ways are to test the Goa ore for beneficiation,” said Vinod Nowal, director and CEO, JSW Steel.
He said there is a controversy on iron ore mining across the states of Karnataka, Orissa and Goa and as soon as the brouhaha subsides, we will bring our first cargo from Goa to test it in its plant at Vijayanagar.

Acharya said JSW Steel does use some low quality ore after beneficiation but they are of still higher Fe content than the iron ore available from Goa.

“Currently we beneficiate 57-58% Fe content iron ore and bring it up to 63-64%. But in case of Goa, we will have to mix it with some percentage of high quality ore to reach the desired levels permissible in our furnace,” he said.

He said JSW is currently studying the cost dynamics of the same and a final decision will be taken in some time.

However, Nowal said the first cargo from Goa could reach JSW’s factory gates in Karnataka as early as next month.

In fact, sources say the company had also been talking to Fomento Resources of Goa, a leading privately held mine operator, to source iron ore from the latter’s mines for JSW Ispat’s Dolvi steel plant in Maharashtra. But so far no concrete decision has been taken.

JSW Steel currently runs a 10 million tonne steel plant in Vijayanagar and a one million tonne steel plant at Salem. Besides, it also owns JSW Ispat as an associate company which has capacity of 3.3 million tonnes.

While the company has failed to turnaround JSW Ispat since its acquisition in December 2010 due to high input cost pressures, its flagship company had also seen capacities falling to abysmally low levels due to unavailability of iron ore. However, of late, it has taken its capacity up to 90% due to purchase of ore under the e-auction process but chances of sustaining this level is still a doubt, as accepted by the company management during its quarterly media briefing.