JSW might have to shut operations in Bellary:Sajjan Jindal

Moneycontrol Bureau

JSW Steel has said it might have to shut operations in Bellary, Karnataka as  state run mineral major NMDC has stopped supplying iron ore to the company.

The Sajjan-Jindal led company has already scaled down steel production to 30% following a mining ban imposed by the Supreme Court  and now shortage of iron ore has added to the injuries of the steel maker.

The Vijayangar plant in southern state of Karnataka is key to the company as of JSW Steel's total capacity of 14.3 million tonnes per annum, the unit produces 10 million tonnes.

" We will not be able to meet our FY12 production growth targets due to the ongoing issues in Karnataka, " said Jindal further saying that he might have to stop operation in the region due to shortage of coal.

However, the company stock did not react much and slid half a percent at Rs 615.50 on the Bombay Stock Exchange following this news.

It is on July 29 this year, that the company was confronted with a tough environment when the Supreme Court determined to ban iron ore production in the region after hearing an environmental public interest case on illegal mining in Bellary, filed by Samaj Parivartan Samudaya, a non-profit society from Karnataka

However, the apex court partially lifted the ban but still steel makers like JSW are hugely impacted with this ban. This is evident from the fact that JSW Steel  already predicting that its crude steel production in September 2011 may drop significantly.

The ongoing ban has prompted brokerages to give a muted outlook for the company stock. For instance brokerage firm, CLSA has maintained  an