Barring JSW Steel, the prospects of the country?s top three steel producers ? SAIL, Tata Steel and Essar Steel ? will not be impacted by the ban on iron ore mining in Bellary, Karnataka, by the Supreme Court last week.

The ban will also not adversely affect the country?s capacity addition of around 10 MT planned during the current fiscal with only around 3 MT (planned again by JSW) likely to be affected.

In the last fiscal, India?s installed steel-making capacity stood at 78 MT and additional 10 MT would be added this year. Of this, only 3 MT being planned by JSW is in Karnataka which may get affected while the balance 7 MT ? planned by SAIl, Tata Steel and Essar ? are outside the state and would be on track.

In fact, even if expansion plans of the top four producers, including JSW Steel up to 2020 is taken into account, none of them would be impacted since all of their expansion is outside the state of Karnataka.

Iron ore is the chief raw material for steel-making and about 1.5 million tonne (MT) of ore is required to make 1 MT of steel. With regard to supplies of iron also, barring JSW Steel and a few downstream units and specialty steel makers, none of the players would be affected.

The production facilities and iron ore supply lines of the major steel producers is thus: Out of a total of 78 MT installed capacity for steel-making, SAIL produces around 14 MT, JSW-Ispat (JSW took over Ispat earlier this year) produces 13 MT, Tata Steel 10 MT and Essar Steel 8 MT. Of these only 10 MT of JSW?s manufacturing facility is in Karnataka. The manufacturing facility of others like SAIL, Tata Steel, Essar and Ispat are outside Karnataka. Coming to supplies of iron ore, SAIL and Tata Steel meet 100% of their requirement through their own captive mines which are located in the eastern region of the country. Essar Steel buys bulk of iron ore from the state-owned NMDC and the remaining from mines in Orissa.

The Karnataka ban does not affect the production of NMDC because the bulk of its 38 MT annual iron ore production comes from its mines in Chattisgarh. Barely 5% comes from Karnataka and even these are outside the Bellary region so the ban does not apply to them.

Coming to JSW, it sources 40% of its iron ore requirements from NMDC, which would not be affected but the balance 50% is bought from private miners in Karnataka which would get impacted now. JSW, Essar and Ispat do not have captive iron ore mines.