NEW DELHI Jindal Steel and Power Ltd (JNSP.NS) will consume 25-30 million tonnes of iron ore a year by 2015, three times current volumes, and source most of the raw material from abroad, the company's chief executive told Reuters.
The increased demand for iron ore is in line with Jindal Steel's plans to expand its production capacity to 11.5 million tonnes in two years from 3.5 million tonnes at present.
India is the world's No. 4 steel producer but many domestic steelmakers are being forced to look for raw material sources overseas as a crackdown against illegal mining has banned or curbed production in key states.
"Our steel plants are already in execution and when we commission them, we would need more iron ore," Ravi Uppal said on Tuesday. "We would like to source from our own mines to reduce the element of uncertainty."
Jindal Steel's annual steel capacity would rise to 7.5 million tonnes by October when plants in eastern India and Oman start operating, before increasing further to 11.5 million tonnes by 2015, Uppal said.
Apart from the 2 million tonnes in Oman, the rest of the capacity is in India.
Jindal Steel, India's third-biggest steelmaker by market value, is exploring for iron ore assets in countries such as South Africa, Mauritania and Senegal, Uppal said.
"Simultaneous investigations are going on, but we have not set a cap on investments," he said. The company is also in talks to buy an iron ore mine in Liberia, he added.
India has curtailed iron ore production in major producing states Karnataka and Goa in a bid to halt illegal mining. That has slashed the country's output and with exports similarly curbed by taxes and shipment bans, India last year lost its position as the world's third-biggest shipper of the raw material.
Top global steelmakers ArcelorMittal (ISPA.AS) and POSCO (005490.KS) last week scrapped plans to build billion-dollar plants in India after delays in getting iron ore mines and land, dealing a blow to the country's plan to boost its steel capacity that currently is only about a tenth of top producer China's.
India's iron ore output is estimated to have fallen to 140 million tonnes in the year ended March 31, from 167.3 million tonnes a year ago, government data showed.
(Editing by Manolo Serapio Jr. and Jeremy Laurence)
Trending On Reuters
It remains to be seen whether Nifty will be able to break the 8,100 mark during October. With major events out of the way, the next trigger will be the Q2 FY16 earnings season which is expected to kick off next week. It is advisable for the investors to continue building their equity portfolio by utilising market volatility as an opportunity, writes Ambareesh Baliga. Full Article