"The Jindals have instead decided to inject more funds in VMPL. We willinvest an additional Rs 6 crore in the company, which explores and developsmines at the Kumaraswamy and Thimmappanagudi deposits in the Bellary-Hospetarea," JVSL vice-chairman SK Gupta said.

The company's talks with some leading mining companies like Broken HillProperty (BHP) Pte Ltd and CRA-RTZ of Australia and Met-Chem of Canada, forthe VMPL stake did not make much headway, he added. Due to the prevailingeconomic sanctions, most of the Australian mining companies are said to begoing slow on their investments in the country.

According to Gupta, VMPL is expected to produce about 50 lakh tpa of ironore once operations get stabilised. The company also plans to hike themining capacity by spreading its wings to other areas as well.

JVSL, which is also setting up a Rs 4,968-crore integrated steel facility inthe state has decided to increase the authorised share capital to Rs 2,000crore from the existing Rs 1,500 crore. This comes close on the heels of thecompany's plans to increase manufacturing capacity from 1.25 tpa to 1.6tpa.

For setting up the additional capabilities, the company has revised theproject cost to Rs 4,968 crore from Rs 4,138 crore.

Gupta said the increase of Rs 830 crore is due to the forex fluctuations,increased requirement of margin money for working capital, and additionalinterest cost on account of slippages in supply of certain criticalequipment.

The company has also finalised the funding pattern to raise extra funds foradditional capacities.

JVSL's promoters will be infusing Rs 150 crore, while the company willapproach banks for a Rs 421-crore term loan.

The company will also issue convertible debentures to be placed withfinancial institutions and banks to the tune of Rs 111 crore. The remainingfunds are expected to come from prospective buyers and through externalcommercial borrowings (ECBs).