Industrialist Sajjan Jindal-led JSW Steel will spend Rs 12,000 crore as capex for the rest of the financial year, even as it continues to scout for iron ore and coking coal mines. The firm will add another 8.5 MTPA capacity this year, which after getting commissioned will generate funds for its planned capacity addition of 50 MTPA by FY30, a top official said.
“We have spent nearly Rs 8,000 crore of the total Rs 20,000-crore capex earmarked for this fiscal, and the remaining would be utilised for capacity addition of 6.5 million tonne per annum (MTPA). This capacity addition will be undertaken between Bhushan Power & Steel (BPSL) and Vijayanagar plant in this fiscal,” JSW Steel Joint MD & CEO Jayant Acharya told FE in an interaction.
Further, it would add a total of 8.5 MTPA — 6.5 MTPA plus another 2 MTPA at Vijayanagar — this year, taking its total capacity to 36.7 MTPA from the present 28.2. With this 36.7 MTPA becoming productive, JSW Steel expects it to bring in additional capital for the next phase of expansion. “Then we will go to our next phase of expansion of up to 50 MTPA through brownfield by FY30,” he added.
On JSW Steel’s discussions to acquire a majority stake in Canada’s Teck Resources, said the company is looking at “all possibilities” to improve coking coal supply. These include strategic alliance internationally and that in the country too.
The company had initiated discussions with Teck Resources to acquire anywhere between 20% and 75% stake in its steel-making coal, also known as metallurgical coal or coking coal, business. In a bid to ensure raw material security, the firm was looking to “selectively bid” for iron ore and coking coal mines, including iron ore mines and a steel plant of ESL Steel (part of billionaire Anil Agarwal-controlled Vedanta).
“We are more interested in the mining asset,” Acharya said about the bids for Vedanta’s assets, but declined to elaborate.
JSW Steel, which has 13 mines that are operational, has won seven more iron ore and two coking coal mines through government auctions in this calendar year. “Our efforts are to develop these mines quickly and integrate them with our operations. So, our captive iron ore supplies will increase and we will also bid for newer mines as and when they come up…,” he added.
Talking about steel prices, he said that prices in India would remain range bound during the seasonally strong second half of the year as raw material prices, which rose internationally, are expected to correct. The global steel demand, which remained flattish mostly through calendar year 2023, is expected to be better for the rest of the year.
“Rebuilding infrastructure in the developed world, in countries impacted by war and building of economies in the developed world – like India and certain Asian countries – over the next decade or two, will help the steel demand,” Acharya added.