JSW Steel Prepares for Karnataka Iron Ore Deficit

Indian state-owned NMDC is expected to raise iron ore prices at electronic auctions held in the state due to the suspension of production at one of its largest iron mines in Domalimal in Karnataka.

The move could distort the operations of more than 20 small and medium-sized steel plants with an annual capacity of about 25 million tonnes (million tonnes).

JSW Steel, the largest steel producer in the state with a powerful 18mtpa Vijayanagar plant, has interim measures to meet the deficit by sourcing and importing ore from Odisha.

SW Steel is meeting part of its ore requirements for the Karnataka plant outside the country due to uncompetitive prices and constant shortages. JSW Steel consumes about 20 million tonnes of iron ore for its Vijayanagar plant and, depending on the price, buys around 5 million tonnes per year from the Donimalai NMDC mine.

JSW Steel recently acquired six Category C iron mines in Karnataka and began producing 0.7 million tonnes at two mines. Two more mines are expected to start operating next month, taking control of a 2 million tonnes per year source.

It is expected that by the second quarter of next year, the company plans to increase the volume of potential energy sources to 5 million tons per year, commissioning two more mines. The NMDC said that such an introduction of the premium is not in line with the Mine and Minerals (Development and Regulation) law and "is also not economically viable."