Mining scam fall-out: JSW shuts down 2 blast furnaces at Vijayanagar plant

Last Friday, the Supreme Court had ordered suspension of all iron ore mining operations in the Bellary region on account of environmental degradation in the area. Steel and allied industries have said that this would lead to closure of their operations as they have no stock left

New Delhi: As a direct fall-out of the iron ore mining scam in Karnataka, JSW Steel today said it has closed down two blast furnaces of about 2.3 million tonnes steel production capacity at its Vijayanagar plant in Bellary district due to the unavailability of iron ore, reports PTI.

"I can confirm that two blast furnaces have been shut down as there is no iron ore available. Our production has gone down by 35% to 40%," JSW Steel director (commercial and marketing) Jayant Acharya said.

He added that depending up on the availability of iron ore, the company would decide when to re-start the blast furnaces.

However, the JSW marketing director refused to comment on the extent of losses due to the production cuts.

"We would not like to quantify it at this juncture," Mr Acharya said.

JSW Steel, whose iron ore requirement stands at about 60,000 tonnes per day, sources about half of its requirement from the Bellary-Hospet region in the state and has about two-three days stock left.

Last Friday, the Supreme Court had ordered suspension of all iron ore mining operations in the Bellary region on account of environmental degradation in the area. Steel and allied industries have said that this would lead to closure of their operations as they have no stock left.

Yesterday, Tata Metaliks, a subsidiary of Tata Steel, said due to the paucity of iron ore, it may close down its 2 lakh tonnes per annum pig iron plant in Goa in a week as the plant is dependent on iron ore supplies from the Bellary-Hospet belt in Karnataka.

The Karnataka Iron and Steel Manufacturers' Association (KISMA) gave a presentation to steel minister Beni Prasad Verma yesterday in this regard.

Moreover, in a separate statement, the Bangalore Chambers of Commerce and Industry has said the suspension of iron ore mining could adversely impact the country's gross domestic product (GDP) by 0.5%, amounting to $8.5 billion.

"Karnataka-based iron and steel companies are approaching a critical stage of closure of their manufacturing activities in the next 2-3 days following the Supreme Court pronouncement last Friday halting iron ore mining activities in the Bellary region," it added.

Karnataka produces 16 million tonnes iron and steel in a year, which is a little less than 25% of the country's total production.

The state also produces more than a fifth of India's total iron ore production, which is around 220 million tonnes annually. Of this, about 80% comes from the Bellary-Hospet region.

Half of the production from the Bellary-Hospet region is consumed within the state, including the steel plants of JSW Steel, Kalyani Steel and Mukund Steel.

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Kotak Mahindra, CIMB sign business cooperation arrangement

The two financial institutions will cooperate and explore opportunities arising from cross border business

Kotak Mahindra Bank has entered a business cooperation arrangement with CIMB Group Sdn Bhd, Malaysia (CIMB).

As per a framework agreement, the two financial institutions will cooperate and explore opportunities arising from cross border business, investment and trade flows, with a focus on select countries in the India-ASEAN corridor. The cooperation would cover various businesses of mutual interest including M&A advisory, trade finance and other corporate solutions, and NRI banking & remittances, subject to relevant regulations.

CIMB Group is Malaysia's second largest financial services provider and one of ASEAN's leading universal banking groups. It offers consumer banking, investment banking, Islamic banking, asset management and insurance products and services.

On Wednesday, Kotak Mahindra ended 0.51% up at Rs458.70 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.94% to 17,940.55.

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Hindustan Tin, Rexam to invest Rs220 cr in beverage can market

The new line represents a capital investment of Rs220 crore over two years

Rexam PLC, the global consumer packaging company, and Hindustan Tin Works Ltd, an Indian can maker are building a new high speed beverage can manufacturing line in Taloja close to Mumbai.

The new line represents a capital investment of Rs220 crore (£30million) over two years. It will initially produce 33cl and 50cl cans and then slim cans, increasing total capacity from the current 300 million cans per year to 850 million cans per year. Production start up is planned for the final quarter of 2012.

On Wednesday, Hindustan Tin ended 3.6% down at Rs89.30 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.94% to 17,940.55.

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