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JSW Steel today said it expects to clock better capacity utilisation in the coming days with the gradual resumption of iron ore mines in Karnataka.
"With the gradual resumption of iron ore mining in Karnataka and the sale of sub-grade ore, we are hopeful of the iron ore quality improving in the coming months, which will help us in improving our productivity and utilisation," JSW Steel Chairman and Managing Director Sajjan Jindal said at the company's Annual General Meeting here.
In September 2012, the Supreme Court allowed resumption of mining operations in 18 Category "A" mining leases. In April 2013, it allowed resumption of all mining operations in the remaining Category 'A' mines and Category 'B' mines with certain riders. Additionally, sale of sub-grade iron ore was also allowed by the apex court.
However, due to the mining ban in Karanataka, JSW Steel had to cut its production and with that capacity utilisation at its Vijaynagar plant had to reduce significantly.
"...Your Company had to contend with additional challenges on account of a mining ban in Karnataka which significantly constrained iron ore availability during the year," Jindal told shareholders.
He said profitability of the company also got impacted due to poor growth of steel and rising imports during the last fiscal.
"The domestic steel industry faced significant impediments in the form of weak demand growth of 3.3%, the lowest since 2009. Moreover, rising imports, especially from countries with which India has signed Free Trade Agreements (FTA) like Japan and South Korea put pressure on margins," Jindal said.
Meanwhile, he said the company would continue to invest in improving productivity and efficiency, enrich product portfolio and prepare ourselves for future opportunities.
"Towards this end, we completed the second phase of our 20 million tonnes per annum beneficiation plant; enhanced capacities of Corex II, Blast Furnace 2 and Hot Strip Mill 2 at Vijayanagar," he said.
