New Delhi, March 17 (PTI): JSW Steel has put on hold the expansion of its 10-million- tonne Vijayanagar plant in Karnataka because of continued iron ore shortages.
The company, headed by Sajjan Jindal, had planned to expand its Vijayanagar capacity by 2mt. The Rs 2,695-crore expansion was proposed to be completed in 2013-14.
“We have put it on hold as far as the expansion of 10mt to 12mt is concerned (at Vijayanagar). We want the iron ore situation to improve before we do the expansion,” JSW joint managing director and CFO Seshagiri Rao said.
To fund the expansion, the company had plans to take Rs 1,750-crore debt and meet the rest of the investments, about Rs 945 crore, from its cash reserves. However, all of this has been put on hold, Rao said.
“We have not really spent big money on it and have not placed the orders. So, it is on hold,” he said.
On whether the paucity of iron ore — the key steel making raw material — is the only reason for not going ahead with the expansion, Rao said, “Yes”.
JSW Steel has been struggling to run the Vijayanagar plant at its optimum capacity for more than one-and-a-half years because of the shortage of iron ore.