JSW plans to double capacity in Ballari to 23 MTPA

Integrated steel manufacturer JSW Steel plans to nearly double the capacity of its plant at Vijaynagar in Ballari district to 23 million tonnes per annum (MTPA) in two phases.

In the first phase, the company aims to increase the capacity to 18 MTPA at an investment of Rs 25,000 crore. It currently operates a 12 MTPA steel plant. "We are already in the process of expanding our capacity to 13 MTPA in Ballari along with cost saving projects like coke oven and pellet plants. We are also expanding capacity at our Dolvi plant near Mumbai from 5 MTPA to 10 MTPA at a combined investment of Rs 20,000 crore," Vinod Nowal, Deputy Managing Director, JSW Steel told DH.

He said the company will be completing the ongoing expansion at Vijayanagar and Dolvi by 2020. The proposed expansion from 13 to 18 MTPA is on the drawing board and will commence work very soon so that it will be completed by 2025. "As regards to our second phase expansion to increase the capacity further to 23 MTPA will be decided after completing the first phase," Nowal said.

The ongoing expansion projects at Dolvi and Vijayanagar are part of the company's plans to invest Rs 45,000 crore, he said.

JSW Steel intends to fund the expansion projects through a mix of internal accruals and marketing borrowing. As of April, this year, JSW Steel had a debt level of Rs 38,000 crore. "We will maintain our debt at this level and 50% of the cost of expansion will be met through internal accruals, he said.

Nowal said the proposed expansion will largely depend on how the company manages to get raw material required for additional capacity. Currently, there is a shortage of iron ore in Karnataka and the company is sourcing iron ore from other states and also importing. It intends to import 4 million tonnes during the current fiscal from Australia.

"The landed cost of iron ore at our plant is almost equal to that of local ore. As the quality of imported ore is much better compared to domestic ore and the grade is equal to 63% Fe, which gives much better yield," he added.

It also plans to commence iron ore production at six mines it acquired during the auction of ‘C’ category mines in Karnataka earlier this year. These mines will give about six million tonnes per annum. Currently, JSW Steel requires about 22 million tonnes per annum for its Vijayanagar plant.