JSW Steel surrenders Odisha mining lease

5 Aug 2024 , 01:03 PM

JSW Steel has issued a notice to surrender its mining lease for the Jajang iron ore block located in Keonjhar, Odisha, due to “uneconomic operation.” This block is one of four iron ore mining leases acquired through an auction in 2020.

The notice for the lease surrender was submitted on August 3, 2024, and is pending necessary regulatory approvals.

For the quarter ending June 30, JSW Steel reported a net profit of ₹867 Crore, a significant decline from ₹2,428 Crore reported for the same quarter the previous year. This drop was attributed to weaker export market conditions and strong competition from Chinese steel. The reported profit was below CNBC-TV18’s estimate of ₹1,149 Crore.

Revenue for the same period grew by 2% year-on-year to ₹42,943 Crore, compared to ₹42,213 Crore in the previous year. This revenue figure was 4% higher than CNBC-TV18’s estimate of ₹41,276 Crore.

In early July, JSW Steel announced its consolidated crude steel production for Q1 FY25. The company produced 6.35 million tonnes (MT) of crude steel, marking a 1% decrease year-on-year and a 6% decrease quarter-on-quarter, primarily due to planned maintenance shutdowns.

Despite the reduction in production, JSW Steel maintained a robust capacity utilization rate of 87% at its Indian operations for Q1 FY25.

On the previous Friday, the company’s share price closed nearly 4% lower at ₹898 per scrip. At the time of writing on August 05, 2024 at 12:58 pm, shares of JSW Steel is trading at ₹855 which is a 4.90% dip than the previous close. JSW Steel shares has witnessed a 5.22% gain in the last one year, and 2.52% dip since the beginning of the year.

JSW Steel, headquartered in Mumbai, is a major player in the steel industry and part of the JSW Group. It is the second-largest private sector steel company in India following mergers with Bhushan Power & Steel, Ispat Steel, and Jindal Vijayanagar Steel Limited.

As of July 2023, JSW Steel has an installed production capacity of 29.7 million tonnes per annum (MTPA) in India and the United States. The company plans to increase this capacity to 38.5 MTPA by the financial year 2025.

Approximately 98% of JSW Steel’s revenue comes from steel and related products. This includes long rolled products (18%), galvanised coils/sheets (15%), CR coils/sheets (9%), plates/pipes (5%), and other miscellaneous steel products (5%). Iron ore contributes 2% to the revenue. About 70% of revenue is derived from India, while 30% comes from international markets.

The company historically emphasizes flat products due to its origins in cold rolling. Typically, half of its flat products are directed to downstream facilities for additional processes such as galvanizing, coating, or tinning.