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JSW Steel a Victim of Illegal Mining in Karnataka: Sajjan Jindal, Chairman, JSW Steel

India CSR by India CSR
July 5, 2012
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NEW DELHI: JSW Steel today said it is a victim of illegal mining in Karnataka and has been facing significant shortage of iron ore for its unit in the state since the issue came to light.

The Supreme Court had banned mining in Karnataka last year leaving JSW Steel to operate its Vijaynagar plant at below capacity.

“Consequently, we have faced significant shortages in the supply of good quality domestic iron ore… As the crisis in iron ore intensified in September 2011 pending commencement of e-auctions, we continued to operate out furnaces at lower capacity,” JSW Steel Chairman Sajjan Jindal said in a letter to shareholders.

“The operational efficiency of the company improved in the latter half of the year as the quality of iron ore received from the e-auctions improved allowing us to increase capacity utilisation. From this, it can be seen that your company has been a victim in the entire illegal mining matter,” he added.

JSW Steel has 10 million tonnes per annum steel-making capacity at its Vijaynagar facility in the state. The company has already invested Rs 35,000 crore in the facility over the last 20 years.

“Even after having had a presence in the state of Karnataka for more than two decades, investing more than Rs 35,000 crore and creating thousands of jobs in the state, JSW Steel remains the only major steel company in India with no captive mines,” he rued.

Earlier this year, the Supreme Court, however, lifted the ban on mining in category A mines, subject to certain conditions.

“We expect the re-commencement of iron ore mining in Karnataka to take place within a few months. With category B mines expected to open sometime this year as well, iron ore availability within Karnataka should cease to be a major hurdle in the short run,” Jindal said.

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