Q - What drove profits this quarter?
A - The growth in the sales volume and 54% rise in production helped us in improving our overall profitability in absolute numbers. At the same time, our costs have come down by 41% as compared to corresponding quarter of the previous year. Even though realizations are down by 38%, we were able to make it up on account of volume growth and also reduction in cost.
Q - As far as steel prices are concerned they are quite weak right now and your realizations are down. What are you doing to improve them?
A - As far as the realizations are concerned even though prices have gone up in the first half of this fiscal year, the domestic prices within China is witnessing some correction. We are seeing some improvement in steel prices but the raw material prices remain high. The iron ore prices are not coming down below USD 90, similarly coking coal prices are at USD 170 per tonne. Taking raw material prices being high and also the de-stocking of inventory is over in the US and Europe, we expect a demand recovery in certain sectors.
Q - What's your plan B if production from Mozambique is not up to the mark?
A - We have two mines in Mozambique and have already completed the investigations and drilling. We have around 188 million tonne of reserves. Of this, significant portion is thermal coal. The second mine does not appear to be a good mine as it has coking coal with very high ash content.
So second mine is not possible to do anything whereas first mine still there is a thermal coal. Going forward, we do have a Plan B and that's the coking coal mine in Jharkhand. We have already started a lot of preliminary work there where we have got certain clearances today. We will be able to make it operational in the next 24 hours. It has a license to mine up to 8 million tonne per annum.
We have 69% share in that. We will get 5.5 million tonne of coking coal for us, may not be immediately but if you look at 2-2.5-year scenario, we will have definitely captive coal available to JSW Steel.
(Sourced from ET Now)
