JSW Steel today said shortage of iron ore had "severely impacted" its production this month and the company was running units at 75% capacity.
The company further said that cut in production would continue until the supplies of the raw material, lying at the mines in Karnataka and estimated at 25.88 million tonne, begin.
"As the supply of iron ore from this stock is yet to resume, the crude steel production in September 2011 is severely impacted.
"This cut in production is expected to continue till the resumption of the iron ore supplies from the e-auction by 'Monitoring Committee' in terms of Honourable Supreme Court order dated September 2, 2011," JSW said in a statement.
Talking about the steel production of last month, the company said that despite paucity of iron ore, the crude steel production increased by 23% to 6.64 lakh tonne in August vis-a-vis 5.39 lakh tonne in the corresponding year-ago period.
"Higher production is mainly attributable to the commencement of 3.2 million tonne per annum expansion project at Vijayanagar Works on July 20, 2011," JSW said.
Iron and steel units in Karnataka and neighboring states, including JSW Steel, have been struggling to run their units, following an apex court imposed ban on mining in Bellary, Tumkur and Chitradurga districts of the state.
However, the apex court had allowed release of 1.5 million tonne per month of iron ore from the stock of 25.88 million tonne, lying at various mines of the state and permitted only state-owned NMDC to produce 1 million tonne per month (or 12 million tonne in a year).
JSW runs a 10 MTPA steel plant in Vijayanagar, which is adjacent to Bellary, while it has 1 million tonne steel making facility in Salem of Tamil Nadu.
Making a reference of Supreme Court imposed ban on mining in Karnataka's Bellary, Tumkur and Chitradurga districts, the company further said, "The production in August 2011, would have been higher, had the suspension and transportation of mining of Iron ore not been there."
The shares of the company closed down by 0.65% on the BSE at Rs 678.95 apiece.
