Govt must ensure raw material supply to performing steel cos: Naveen Jindal


Business, Companies

Companies which are giving the interest regularly must get uninterrupted supply of raw materials.

Jindal Steel and Power Ltd chairman Naveen Jindal. (Photo: PTI)

Odisha: The government should ensure that performing steel assets do not face any shortage of raw material, Jindal Steel and Power Ltd (JSPL) chairman Naveen Jindal said.

"You see only three private major steel companies have not embarrassed their investors, the rest have been pulled to the NCLT," Jindal told PTI in an interview.

The government must give priority in providing raw material to those steel companies that are not facing insolvency proceedings and regularly paying interest on debts, he replied to question related to the impact of rising prices of raw materials on his business.

Insolvent firms do not pay any interest, nor are they able to service their debt and such insolvent firms can even sell their items at lower rates, Jindal added.

"We are taking up this matter with the government that those companies which are giving the interest regularly must get uninterrupted supply of raw materials. I would say other ministries also, whether it is coal, railways, they must support them (performing companies) by meeting their requirement.

"If you don’t meet the requirement if there a shortage then government must supply raw materials on priority basis," he added. He further said that rise in iron prices is very unfortunate. They have gone up heavily in last two-three months and "(due to it) we have also raised rates. There wasn't any other way by which this rise could have been evaded. We were bound to pass on the burden."

The miners from whom the iron ore was being bought are citing the reason that because of court orders mines were closed and supplies were hit. The prices of other materials like coking coal, electrode, coal and refractory are shooting up.

"We have to service the debt also. We are bound to raise the rates," Jindal said.

State-run iron ore producer NMDC raised the prices of higher grade iron (lumps) by Rs 500 to Rs 3,100 per tonne for January month. It hiked the rate of iron ore fines by Rs 500 to Rs 2,760 per tonne for the month.

The price hike in January is the third-straight rise since November 2017 when NMDC had fixed the rates of lump ore at Rs 2,300 a tonne and that of fines at Rs 2,060 a tonne. In December, 2017, it raised the price of lump ore by Rs 300 a tonne to Rs 2,600 and fines by 200 to Rs 2,260 a tonne.

A company official said coking coal which was at USD 179 a tonne in the first week of November has reached USD 262 a tonne in international markets.

There is also shortage of railway rakes, another company official said. Supply and production of steel, aluminium, cement and captive power producers have been hit due to shortage of railway rakes and this situation needs immediate correction, Jindal said.