Jayaswal Neco through the integration of its group companies is transforming itself from a primary pig iron and steel casting producer to an integrated steel producing company.

The process of integration is expected to be completed this quarter. This would add 0.8 million tonne per annum of sinter plant, 0.25 million tonne per annum of sponge iron plant, 0.8 million tonne per annum Steel Melting Shop and 0.9 million tonne per annum of rolling capacity to the company’s original capacity of 0.7 million tonne per annum of pig iron and 0.2 million tonne per annum of iron & steel casting.

The integration will also raise the power generation capacity to 45MW. It is also setting up a wire rod block and a 6MW WHRS power plant at a total CAPEX of INR 930 million to be operational in FY12. Further, the company plans to set up a 0.3 million tonne per annum sponge iron unit associated with a 50MW WHRS power plant over the next three years. JNE is also setting up a 300MW coal based power plant at an estimated cost of INR 16.5 billion through its 100% subsidiary Raigarh Energy Ltd.

The company was allotted one coking coal, two thermal coal and seven iron ore mines to meet its raw material requirement. Of the two thermal coal mines, the Gare Block IV/4 in Raigarh has been operational since FY07 and produced 0.4 million tonne per annum in FY10. The thermal coal block of Gare IV/8 and the coking coal mine are at various stages of regulatory approvals and the development of the mines will take a few years. Of the 7 iron ore mines, the company has received all clearances for two. While the company expects to start mining by end of FY11, we believe, commissioning would take further time as both the mines are located in areas affected by Naxalite activities. Once its iron ore and coking coal mines are operational, we believe that JNE’s profitability will jump sharply.

(Sourced from www.indiainfoline.com)