Dr. Vinod Nowal, deputy managing director and non-independent executive director of JSW Steel Ltd is ready to set his foot into a new terrain, one that will colour his boots a rusty red. With JSW’s technical bids for six mines in Keonjhar in Orissa where some of the biggest and the best supply of iron ore is feverishly mined and red dust fills the air, Dr Nowal speaks about the company’s plans to make investments whether it wins or loses the bids.
Following are edited excerpts from a telephonic interview with Ruchira Singh:
Q. Are you expecting any delay in the mine auction process in Odisha?
A. I don’t think there will be any further delay in the auctions. In the last few months we have been meeting the government regularly and they have assured us that they will take measures so that there is continuity of supply.
Q. What could these measures be?
A. There could be a provision for temporary mining under the old rules while simultaneously applying for the environment clearances.
Q. A recent gazette notification suggests that the new mine owners will have to apply for new environment and forest clearances. Doesn’t this suggest there might be a delay in resumption of production when leases expire on March 31?
A. The gazette notification is not clear, but they are likely to formalize something. Legal, environment and mining ministries are working together on this. This is the impression we got.
Q. In the run up to the auctions, are you expecting any disruptions in supply from Odisha? How are you preparing for it?
A. We are regularly buying and using it (iron ore) because as usual demand and supply is there. But it is true that there is not a good network of rail and road.
Q. What is the solution to make mining better in this region?
A. They should go for a new system of conveyer belts and slurry pipelines. That is the only solution. The government has to work and industry has to work — together.
Q. JSW is investing in a slurry pipeline in Keonjhar. Can you please give some details about it?
A. We are making a slurry pipeline. It can be for captive use and for others also. It will take two to three years. It does take that much of time as approvals are needed, construction is needed, technology partner is needed. Once we get the mine, we will start it.
Q. And if you don’t get any mine, will you not build it?
A. We will build the slurry pipeline in case we are getting the mine and hope we get the mine too.
Q. From where to where will the pipeline be built?
A. It will connect the mine area (in Koenjhar) and Paradip. This will link both the Paradip port as well as our upcoming plant (in Jagatsinghpur).
Q. Several iron ore consuming companies have applied for storage area for iron ore in Keonjhar. Are you one of them?
A. No because we are not in Odisha state as a consumer. We are bringing the ore to Maharashtra.
Odisha iron ore being loaded to railway rake
Q. So are you storing up iron ore for potential supply disruption at your plant in Dolvi?
A. We are storing up a little.
Q. Do you expect international iron ore prices to go up? There is Indian disruption coming up and there are bush fires in Australia…
A. People say that to try to inflate prices. These are fires. It is not flooding or storm.
Q. Are you happy with the current prices of iron ore?
A. It is okay. We can buy from the international market. Iron ore is available.
Q. How is the situation of the steel market? We are seeing bigger than usual inventories…
A. Steel inventories have been exhausted. This is the last quarter and it is seeing good demand. We have hit the bottom and things will pick up from here.
Q. How is the foreign market doing? Some companies are seeing better revenues from their overseas businesses. Are you too seeing such a thing?
A. Foreign market is picking up. It has improved.
Q. What is the outlook for steel prices?
A. It has gone up lately by $25-$30/tonne.
Q. What kind of improvements will you make in Odisha?
A. In the area which has given thousands of crores of revenue from minerals, should people be living in such a poor condition? This is also the place where the mineral fund is one of the highest. We will definitely change it.
To learn how the mines auction 2020 unfolds, be a part of SteelMint Events’ 4th Indian Iron ore, Pellet and DRI Summit which is scheduled on 2-3 March 2020, in Hotel LaLiT, New Delhi.
Credits – Ms Ruchira Singh