JSW Steel has restarted production at the two million tonne per annum pellet plant at Monnet Ispat and Energy and ramped up the Direct Reduced Iron (DRI) production to its optimal capacity to bring down the cost.
The Sajjan Jindal-owned JSW Steel along with Aion Investments acquired Monnet Ispat in September in an insolvency driven process. The combine, which was the only bidder for Monnet asset, paid Rs 2,875 crore while Monnet owed banks Rs 11,000 crore.
Seshagiri Rao, Joint Managing Director, JSW Steel told Business Line that when DRI plant was operating at lower capacity Monnet was buying iron ore and pellet from open market and now the cost will come down after commissioning of the pellet plant.
While DRI plant is working at its full capacity, the pellet is now operating at 60 per cent utilisation and will be ramped up progressively, he added.
Other plans
In the second leg, he said some of the facilities such as blast furnace, melt shop and bar mill that were shut down due to want of fund will be re-commissioned next month.
In the third phase, Rao said incomplete projects including expansion of melt shop and plate mill will be taken up and the asset will turn profitable in two years.
Legal recourse for reclaiming coal mine
JSW Steel is also looking for any legal recourse to reclaim the coal mining lease that was cancelled by the Government.
In 2015, the Coal Ministry had entered into a development and production agreement with Monnet Ispat for developing a coal mine in Chhattisgarh.
In December 2017, after the initiation of insolvency proceedings, the mining agreement was terminated while the company was under moratorium.
Both NCLT and NCLAT has ruled in favour of termination of the agreement claiming that the Government was incurring revenue loss of about ₹314 crore annually.
“While exploring legal recourse for reclaiming the coal mine, we are also looking whether the government is going to put the mine under auction,” he said.
Bhushan Power deal
Claiming that JSW Steel has tied up funds for executing the Bhushan Power and Steel deal, Rao said the proposal now has to be cleared by both NCLAT and the Supreme Court.
Stressed Bhushan Power promoter Sanjay Singal has filed a writ petition in the Supreme Court questioning some of the underlying principles of the Insolvency & Bankruptcy Code.
The petition has claimed that some of IBC sections, including the contentious Clause 29A, are 'ultra vires' of some of the rights guaranteed by the Constitution of India. Ultra vires means beyond its legal power.