Naveen Jindal-promoted Jindal Steel and Power Ltd (JSPL) plans to operationalize four of its just acquired thermal coal mines over the next eight to twelve months. Supplies from the new mines – one in Chattisgarh and three in Odisha with a combined capacity of 15.1 million tonnes per annum are expected to save on an average of ₹4,000-5,000 per tonne on thermal coal procurement, as the current e-auction and import price per tonne has been as high as ₹7,000 to ₹9,000.
According to the reports, substantial thermal coal needs to be imported to run DRI plants which will no longer be the case. JSPL won the coal blocks at Utkal C, Utkal B1 and Utkal B2 in Odisha; and the Gare Palma IV/6 mine in Chattisgarh. The company’s current thermal coal requirement is 10.8 mtpa on 9.6 mtpa of crude steel production.
Post capacity expansion ( apprx ₹20,000 crore capex program), the company would require 18.7 mtpa thermal coal on 15.9 mtpa crude steel production. In the near term, JSPL has secured a few contracts in Europe, filling the gap caused by the Ukraine War. It hopes the capacity expansions will result in higher export volumes in the longer term, adding to higher profitability.
JSPL will also be operationalizing its hot strip mill at Angul by March 2023. To be used for manufacturing hot rolled coils (HRCs), the mill will have a capacity of 5 million tonnes per annum and is part of the multi-crore expansion plan that the company has taken up. Interestingly, JSPL sources a significant portion of coking coal – one of the key raw materials in steelmaking – from its mines.
