JSW Steel said on Friday that it has now increased production at its primary steel plant at Vijaynagar, Karnataka, to 50-60 per cent. The plant accounts for 10 million tonnes capacity of the company's total capacity of 14.3 million tonnes a year .

This is being done primarily through iron ore sourced from e-auctions held by state-owned miner NMDC, apart from alternate raw material sourcing from other mines in the country.

In September, the steelmaker had reduced production to as low as 30 per cent of capacity at the Vijaynagar facility due to the lower iron ore supply and said that it may have to shut the plant if supply drops further. In the quarter, production was lower by around 4.5 lakh tonnes.

This follows a July Supreme Court order banning mining in Bellary (in Karnataka) after allegations of illegal mining. Then, in August and September it had allowed state-owned National Mineral Development Corporation (NMDC) to release limited quantities of iron ore.

“We have around 1.9 million tonnes of iron ore (for 38 days), of which we have received 3.5 lakh tonnes. We need 50,000 tone a day to operate at full capacity,” Mr Seshagiri Rao, Joint Managing Director, JSW Steel said.

“Efforts continue to identify more sources of iron ore. It is not economically viable to import iron as we will lose competitiveness,” he added.

For the third quarter, the company has secured 56 per cent of the total material sold by NMDC. The total sold material was 74 per cent of what was on offer, as nobody bid for the rest because of high reserve prices, he said.

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