The unexpected ban of iron ore exports from Karnataka may tarnish India's image overseas, said Mr Sajjan Jindal, Vice-Chairman and Managing Director, JSW Steel, at a press meet here on Tuesday to announce its first quarter results.
“Though iron ore prices may fall in the domestic markets, such drastic measures should be taken in phases,” he added while reacting to the Karnataka Government's decision to curb illegal iron ore mining through an export ban.
And for the State's assurance to allot iron ore mines to ArcelorMittal and Posco, Mr Jindal quipped, “White skins are always given priority probably due to the fact the country was ruled by the British for so long. While it is a fact they bring in FDI, the sons of the soil should not be discriminated. The JFE investment in JSW Steel has proved that Indian companies can also attract foreign funds.” JSW Steel's proposal for captive iron ore is under active consideration for the last several years, he said.
The company has reported a three per cent increase in net profit at Rs 350.27 crore (Rs 340.02 crore) in the June quarter. Net sales improved 19 per cent to Rs 4,646.91 crore (Rs 3,893.87 crore). Profitability was impacted by the sharp rise in raw material cost, dip in demand and fall in price realisation beside a foreign exchange translation loss of Rs 97 crore against a gain of Rs 236 crore last year.
Raw material cost
JSW Steel plans to bring down its raw material cost by sourcing iron ore from its mines abroad. “We expect to receive the first shipment from our Chile mines next quarter while our coal mine in the US will start contributing from the December quarter,” Mr Jindal said.
The company has added 2,64,000 tonnes of steel to its inventory in the June quarter (taking up total inventory to 5,64,000 tonnes) due to a fall in demand. Crude steel production was up 14 per cent at 1.574 million tonnes .
JSW Steel's debt was Rs 17,700 crore for the June quarter. It plans to reduce its consolidated debt-equity ratio from 1.7:1 to 0.5:1 by FY12 through prepayment of some high cost rupee-denominated loans. The scrip was down 0.81 per cent to Rs 1,161 on Tuesday.
