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Jindal group companies in steel-making pact

October 27, 2010 03:13 IST

Two O P Jindal group companies, JSW Steel and JSL Stainless, have entered into an agreement. JSL Stainless will produce coke for JSW Steel and the raw material to produce coke will be supplied by JSW.JSW Steel is promoted by Sajjan Jindal. His brother, Ratan Jindal, is managing director of JSL Stainless.

Arvind Parakh, director (strategy and business development), JSL Stainless, told Business Standard the company's 400,000-tonne coke oven was ready and undergoing trial runs. It was expected to start commercial production in the next 40-odd days. However, as the company's blast furnace was still on the drawing board, it had tied up with JSW Steel for the latter's coke need. Parakh said, "They will use the coke oven plant till our 800,000-tonne blast furnace comes on stream."

JSW Steel will bring in its own coking coal to the JSL plant and JSL will process and produce coke for JSW. Sajjan Jindal-led JSW, will in turn, use the coke for its captive consumption at the Vijayanagar (Bellary) unit and will sell part of it in the local market.

JSL, for the time being, will need only 100,000 tonnes of the 400,000-tonne capacity. This means JSW Steel will have access to another 300,000 tonnes of coke oven capacity for its use. It currently has 2.7 million tonnes capacity of coke oven and is expanding this to 4.6 mt by March, when its steel making capacity will touch 11 mt. After the expansion, the company will need about 5.5 mt of coke. Coke is a key raw material in steel making, being fed into the blast furnace with iron ore.

As for JSL's blast furnace, Parakh said, "We are yet to finalise the plans and look forward to do so in the next 40 days. The funding has been arranged and the suppliers will be shortlisted very soon." The capacity may also be made bigger than what was contemplated earlier, he said.JSW Steel did not wish to comment for this report.

Shubhashish in Mumbai