 "JSPL wins five iron ore exploration contracts in Africa")
“We have got exploration licences in Namibia, Gabon, Sierra Leone, Mauritania and one in South Africa. We have started testing to access the exact number of reserves. It will take about 12-18 months to finalise,” Ravi Uppal, managing director and chief executive, JSPL, told Business Standard in an interview.
The company aims to increase its focus on global operations, mainly for supply of raw materials and minimise risk in prices. Global business, currently, contributes 15 per cent to total revenues, which it expects to increase to 20-25 per cent in the next two years. The mining industry in Karnataka, Goa and Odisha— the three major iron ore producing states in the country — have been impacted by the ban.
The Supreme Court has now allowed partial resumption of mining in Karnataka, which was banned in July 2011. Goa is still awaiting a verdict from the apex court, where mining was banned in September last year. In Odisha, the state government banned export of iron ore in October 2012. It said iron ore mining could be done only for captive use. India, which had been the third-largest iron ore exporter in the world, is set to lose its tag and become a net importer of the material this financial year for the first time in recent times. Due to this, total iron ore exports fell 68.27 per cent to 16.35 million tonnes (mt) during April 2012-January 2013, against 51.52 mt in the corresponding period the year before.
The ban on mining had repercussions on the steel industry as well, since iron ore is the main ingredient in steel making. JSPL imports 1.5 mt of coking coal, which will also increase to over 3 mt. “Once, the new mines start production, we will import from our mines, which will enable us reduce cost as well,” he said.
JSPL’s coking coal in Mozambique has a capacity of 3 mt per annum (pa) currently, which will be increase to 10 mtpa over a period of time.
In Australia, it has acquired a 52 per cent stake in Gujarat NRE Coking Coal, where it will have a capacity of 6 mtpa in the next two-three years, from 1.5 mtpa. Gujarat NRE Coking Coal has two producing coking coal mines in Australia, which are estimated to have reserves of 125 mt and resources of 651 mt.
According to Uppal, the company has a steel capacity of about 5.5 mtpa in the domestic market and 2 mtpa in Oman, outside India. It is planning to increase the total steel capacity to 11.5 mtpa by 2015-16. The iron ore will also be used for its steel plant in Oman. It mainly exports steel in West Asia, Africa, Southeast Asia, Taiwan and the Arabian peninsula. The exports contribute 20-25 per cent of total steel products.
“With depreciation in the rupee over the last few weeks, we believe we will achieve our export targets in a faster way,” Uppal said. The next financial year will be a very good year. This year, all investments will be made. The revenue and profits will come in later, he added.
It is also also exploring steel production and mining projects in Brazil, Indonesia and Mongolia, according to company’s site. It has recently commissioned a steel melting shop and its allied unit of the 6 mtpa integrated steel plant at Angul in Odisha. It will commission 2.5 mtpa capacity out of the total 6 mtpa in the first phase at Angul.
Last year, it had commissioned widest 5-meter wide plate mill under the Angul steel project.
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