According to Money Control, South West Mining, owned by JSW Group Chairman and MD Sajjan Jindal, has won an iron ore mine in Jharkhand, auctioned last week. Situated in the state’s Bhangaon region, the mine has reserves of 40 million tonnes.
The company now will have to get necessary to develop the mine. “The annual production of the mine will be 2 million tonnes. It will take at least a year for the approvals to come in and production to start,” said Seshagiri Rao, Joint Managing Director and Group CFO, JSW Steel.
The steelmaker though won’t source iron ore from the acquired mine as the cost of transporting the resource from Jharkhand to the steel facility in Karnataka, would be high.
South West Mining operates limestone and dolomite mines in Andhra Pradesh, catering to the needs of JSW Steel’s operations in Karnataka. The mining company also operates lignite mines in Rajasthan, supplying raw material to JSW Energy.
Mines in Karnataka – JSW Steel has five mines on lease in Karnataka. Rao had earlier told Moneycontrol that production in one of the mines would start in the last quarter of FY2018, and the rest will start operations in the first half of the present financial year. The five mines collectively will have a capacity of nearly 5 million tonnes of iron ore a year.
The company also participated in the auction of eight other mines in Karnataka. The auction, however, has been delayed after the state requested to reserve up to 25 percent of the mine for commercial use. The mines, which come under C category, have been demarcated for captive use. A final decision will only be made after a directive from the Supreme Court. The situation is similar in Odisha, where JSW Steel is looking to buy mines. At present JSW Steel meets its iron ore requirements partly through NMDC, and imports some of the need.