JSW Ispat to be merged with JSW Steel

Steel major JSW Steel said it expects to merge JSW Ispat with itself once loss-making subsidiary becomes profitable.

Steel major JSW Steel today said it expects to merge JSW Ispat with itself once the loss-making subsidiary becomes profitable.

“We expect JSW Ispat to become profitable by the end of FY 2013. As soon as it becomes profitable,we will start looking at merging the same (with the parent),” JSW Steel Chairman Sajjan Jindal told reporters on the sidelines of the 18th Annual General Meeting here.

JSW Steel acquired a controlling stake in erstwhile Ispat Industries in December 2010 at an enterprise value of USD 3 billion to emerge as the country’s largest producer of the alloy with an annual capacity of 14.3 million tonne.

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“Once we complete the integration of facilities by the end of FY 2013,we expect the company to turn around,” he said.

On the contentious issue of illegal mining,Jindal said the company has been a “victim” of illegal mining.

Even after a presence of more than two decades in Karnataka,and investing over Rs 35,000 crore,creating thousands of jobs,JSW Steel remains the only major steel company with no captive mines,he said.

“Following the Supreme Court verdict in April (partially lifting mining ban in Karnataka),we hope that over the next two weeks,a few category ‘A’ mines (spread over 50 hectares or more) will start opening and over the next two-three months,things should normalise,” he said.

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With category ‘B’ mines expected to open this year,iron ore availability within Karnataka should cease to be a major hurdle in the short-turn,he added.

The company purchased 10.68 million tonne of iron ore in e-auctioned and received 75 per cent by March 2012. Going forward,JSW continues to scout for raw material assets within India and around the world,Jindal said.

“We are looking all across the world to acquire mineral assets for our company and have natural hedge. We invested in Chile,where we have iron ore mines. We export iron ore to China and several European countries from the Chilean mines to provide natural hedge,” Jindal said.

The company also has cooking coal assets in Mozambique. It is hopeful of bringing cooking coal for steel plants in the country,he added.

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JSW Steel has been allotted mines by the government and hopes to explore these mines in joint venture with Coal India by next March.

Going forward,the company hopes to commission greenfield projects in Jharkhand and West Bengal which will significantly optimise its production costs,Jindal told shareholders.

The firm has planned a 2.3 MT per annum rolling mill to increase the production of value-added steel. The first phase will be commissioned in FY 2014 and the second in FY 2015.

The second phase of 1.5 MT of the new hot strip mill will be commissioned by September 2012. This will take its rolling capacity to 5 MT,Jindal added.

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