[Ferro-Alloys.com]Nazim Sheikh, Joint Managing Director, Sandur Manganese, expects iron ore production to shoot up to 1.6 million tonnes per annum (mtpa) from its current levels of 0.74 mtpa in a couple of months after it recently received environment clearences for the same.

 

The company is looking to scale up iron ore capacity to 3.5 mtpa in two to three years.

 

Talking about the tie-up with JSW Steel for iron-ore supply, Sheikh said that the discussions will commence only after the e-auctions of iron ore come to an end.

 

Below is the transcript of Nazim Sheikh’s interview with Reema Tendulkar and Nigel D’souza on CNBC-TV18.

 

Reema: We understand that JSW Steel has initiated talks with your company for a long-term iron ore supply. That has been reported in the paper. Could you confirm it if indeed you have been approached by JSW Steel and you are looking to forge a tie-up with them?

 

A: First of all, at present, there is what is known as the e-auction process in place which is being organised by the monitoring committee set up by the Supreme Court. So all these arrangements for direct supplies and all that will come into play only if and after the e-auction is disbanded with.

 

Having said that, what is important is that sooner or later and especially because of our increased production levels that we are going to be mining, and the requirement production levels that we are going to be mining and the requirement of transportation and the infrastructure because it has become very clear that all the pollution and harassment of the local population, the main culprit is more of transport than mining itself and therefore, the monitoring committee and the Central Empowered Committee (CEC) have rightly, as also the special purpose vehicle (SPV) that has been set up are now concentrating on putting in place aninfrastructure for conveyance of the ore in a more environment friendly manner. And this will mean investment by the buyers in such conveyance systems and investment in conveyance system can be made only if there are assured supply agreement. 

 

So, in that respect, our aim is to tie up with a few consumers, on a long-term basis, so that we can supply the ore to them. And JSW is certainly one of them because in any case, they are the largest buyers.

 

Nigel: So you are confirming to us that yes, JSW Steel and you in the event of e-auction going out of the window, then in fact, you could forge a tie up and then you will be looking to take some iron ore supply. 

 

A: The tie up along with others in general so that our ore is purchased by the local consumers, maybe three of them or four them. I do not know what eventually will happen. It depends on how much we are allowed to produce.

 

Nigel: You were talking about increasing your supplies. Just last month you were at 0.7 million tonnes approximately. How much are you mining currently? How much is permissible and how much you are looking to take your mining capacity to? I believe there are some clearances left.

 

A: We are right now mining at a level of 0.74 million tonnes and we have a capacity of 1.6 million tonnes has been approved by the CEC and we have the environmental clearance for 1.6 million tonnes. The mining plans are in the process of being made and once this is approved, our production will go up to 1.6 million level.

 

Reema: And how soon will that be taking your production levels to 1.6 million tonnes?

 

A: That should be in the next couple of months.

 

Reema: And thereafter, do you have plans to increase your production further? Is there scope for that?

 

A: Yes, because based on the various criteria fixed, it is easy for production level, we would be eligible for something like 3.5 million tonnes. To be allowed to beallowed to produce at the level of 3.5 million tonnes, we will have to get environment clearance enhanced and that process may take a year, year and a half because our application for increase and enhancement of environment clearance has been made long ago which was in the suspension because of suspension of mining and various other factors coming into play. And once the environment clearance is enhanced by MOIL and we get an approval based on the reserve, we could go up to about 3.4 million tonnes of iron ore production.

 

Nigel: I believe that you have some manganese capacity as well. What is the current capacity, what are you looking to take that up to and also, we are aware that MOIL has increased the prices substantially in the last couple of months. Have your prices increased as well?

 

A: Our manganese ore environment clearance is for 0.6 million tonnes, but presently, we are operating at 0.18 million tonnes and the increase in capacity is expected to be conveyed to us shortly because there is a process for that. Their enhanced plans have been looked into by the Indian Council of Forestry Research and Education (ICFRE) and according to us, within the criteria that has been fixed for production limits, we should be getting about 2.5-3 lakh tonnes per annum.

 

Nigel: And how soon will that happen?

 

A: This also is expected to happen in a month’s time as soon as the CEC calls for a meeting of all the concerns to consider revisions in our enhanced plans.

 

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