The Hindu Business Line : Usha Martin's captive mines will meet steel plant's needs

Kolkata May 17 Usha Martin Ltd has integrated iron ore production from its new mines with its steel operation this quarter. The new mines are located in West Singbhum district in Jharkhand with an estimated reserve close to 100 million tonnes (mt) and the ore quality of 62 to 63 per cent purity.

Mr Prashant Jhawar, Vice-Chairman of the company, told Business Line that from this fiscal, captive mines would meet its special steel plant's full requirement against 57 per cent in the last financial year.

Interestingly, it has not so far used iron ore fines and accumulated them around pit heads. "But the ongoing Rs 1,350-crore expansion plan will see installation of a sinter plant, which would bring the fines into the operational fold.

The new licensed coal mines will also become fully functional by December, Mr Jhawar said. The company has been allotted coal blocks by the Jharkhand in the Daltongunge area, which has an estimated reserve of 30 to 40 mt of high-grade coal.

The current coal consumption of the company is around half a million tonnes a year. This would increase to 2 mt in two years after the capacity expansion is through.

Capacity expansion

The implementation of the two-phase steel capacity expansion (to 1 mt from 4-lakh tonnes) and the fund-raising exercise were moving according to the pre-determined timeline, he added. The first phase, which would increase the capacity to 6.5 mt, is to be completed in 2008-09 and the second in the following year.

The promoters have completed subscription to conversion of warrants late last month. This has mopped-up around Rs 98 crore. Earlier, the company has garnered $25 million through GDR issue.

The Rs 400-crore borrowings the company is resorting to — a mix of foreign currency and rupee loan — has entirely been tied up.

Mr Jhawar said that the company is also looking at a greenfield expansion of its wire rope capacity at a cost of about Rs 40 crore.

Usha Martin, the world's second-largest manufacturer of wire ropes, has a capacity of 1.3 lakh tonnes. "We have not identified the geography, or the site. But the process is on. Since the proposed new capacity of around 30,000 tonnes per annum for elevators and general purpose ropes would largely be meant for the overseas markets, location near a coast which is logistically well connected would be preferred," Mr Jhawar added.

More Stories on : Restructuring | Steel | Minerals

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page