JSW Steel puts Chile ore plan in cold storage

Font Size

Print

Feedback

Email

Discuss

Related Articles

Posco project may kick start by JanArcelorMittal eyes new sites for steel plantsTata Steel sales up 25% in Aug

: Hit by the global slowdown, India’s third largest steel maker JSW Steel has decided to postpone its investments, pegged at around Rs 490 crore, in iron ore mines in Chile, and will take a view on this only next year.

The company had earlier put on hold its greenfield expansion in steel making on similar grounds.

Talking to FE, Seshagiri Rao, joint MD and group CFO of JSW Steel, said: "Today there is uncertainty in the demand-supply scenario of iron ore. With entire production of steel coming down from 120 million tonne to 95 million tonne, there are no buyers for iron ore except for China as of now. Hence, huge amount of good quality iron ore is available in surplus from Brazil and Australia on spot basis. If we invest $100 million to make these mines operational, we may not have buyers for it. Hence, we have decided to hold the investment until the situation improves."

JSW had earlier decided to make the mines operational and produce 4 million tonne of iron ore by December 2009. It has already invested $25 million. JSW Steel shares on Wednesday were marginally up by 0.97% to close at Rs 621.95 on the Bombay Stock Exchange.

The company had in January 2008 acquired 8 concessions in a greenfield area for exploration and exploitation of magnetite iron ore deposits at Atacama in north of Chile. With approximately 1200 hectares, JSW Steel had acquired the concessions for a total of $52 million.