JSW Steel cuts output to 30%

The Vijayangar plant in southern state of Karnataka is key to the company as of JSW Steel’s total capacity of 14.3 million tonnes per annum,the unit output is 10 million tonnes.

NMDC officials were not immediately available for comments.

In August,the country’s apex court,after putting an interim ban on iron ore mining in Bellary district of Karnataka due to illegalities,had allowed NMDC to mine the ore and provide 1 million tonnes of the ore every month to steel producers in the state.

The Supreme Court’s directive to supply 1 million tonnes per month has not been fulfilled by NMDC even after 50 days,said JSW Steel.

NMDC’s auction of another 1.5 MT of iron ore,also directed by the apex court,has not provided any relief because,according to JSW,31 percent of the auctioned material was not bought by steel makers as the pricing was improper for the low grade iron ore.

Further,of the balance 69 percent of the auctioned material,only 10 percent was dispatched to the industry till date due to several procedural delays,JSW Steel said.

In these circumstances even continuing steel production at the current levels is very challenging unless iron ore supply of required quality and quantity is restored expeditiously,JSW Steel said.

Shares in the firm,valued at $2.8 billion,have fallen by 47 percent so far in 2011,while the benchmark index shed 21.7 percent.

On Monday,the stock ended down 2.21 percent at 618.60 rupees in a weak Mumbai market.