JSW Steel cuts Vijayanagar production by up to 40%

JSW Steel today said it has cut its productions from its Vijayanagar plant in Karnataka's Bellary district by 35-40% due to paucity of iron ore, a key steel making raw material.

"We have reduced our steel production from Vijayanagar by about 35-40% as we don't have much iron ore inventory left," Sajjan Jindal-led JSW Steel's Joint Managing Director MVS Seshagiri Rao told PTI.

Also read: Centre to plead to SC against blanket ban on Bellary mining

When asked whether the plant was moving towards shutdown, Rao said, "The company has hardly two-three days of iron ore left," but he refused to elaborate.

Last Friday, the Supreme Court ordered suspension of all iron ore mining operations in the Bellary region on environmental degradation in the area.

JSW Steel has 10.3 million tonnes per annum steel making capacity at Vijayanagar in Bellary of Karnataka and it sources about 50% of its iron ore requirements from Bellary, while another 30% is met from Chitradurga district of the state.

Meanwhile, Karnataka Iron and Steel Manufacturers' Association today gave a representation to Steel Minister Beni Prasad Verma stating that the suspension of the mining operation at Bellary would lead to closure of operations of the steel and allied sectors in the region as they have no iron ore left.

Moreover, in a separate statement, Bangalore Chambers of Commerce and Industry said the suspension on iron ore mining could adversely impact the country's Gross Domestic Product by 0.5% amounting to USD 8.5 billion.

"Karnataka-based iron and steel companies are approaching a critical stage of closure of their manufacturing activities in the next 2-3 days following the Supreme Court pronouncement last Friday halting iron ore mining activities in the Bellary region," it added.

Karnataka produces 16 million tonnes iron and steel in a year, which is a little less than 25% of the country's total production.   

The state also produces more than a fifth of India's total iron ore production, which is around 220 million tones annually. Of this, about 80% comes from Bellary-Hospet region.

Half of this production from Bellary-Hospet region is consumed within the state, including steel plants of JSW Steel, Kalyani Steel and Mukund Steel.