JSW Steel flags domestic raw material bottlenecks as India eyes 600 mt capacity

Summary

Jayant Acharya, joint managing director and CEO of JSW Steel, calls for faster iron ore mining and coal washery investments to support India's long-term capacity push, even as JSW prioritises brownfield projects over green steel.

JSW Steel Ltd has called for faster development of domestic iron ore mines and investment in coal washeries to support India's long-term steel capacity ambitions, warning that expanding production will require a stronger raw material supply chain even as the country seeks to reduce import dependence.

"India has a lot of iron ore. We have to make sure that iron ore is brought out in terms of supply, and remove bottlenecks. Mines should not be allowed to stay non-functional once allocations are made. Squatting on resources has to be avoided, and people should get the mines going," Jayant Acharya, joint managing director and chief executive officer of JSW Steel, said in an interview with Mint.

Acharya's comments come amid ambitious national targets. Under the draft National Steel Policy, India aims to scale its crude steel capacity to 600 million tonnes (mt) and consumption to 505 mt by 2047. As an intermediate milestone, the previous NSP policy set a target to raise crude steel production capacity to 300 mt by 2031, up from the current installed capacity of 220 mt. While India possesses substantial mineral reserves, Acharya noted that several mines remain unexplored or non-operational, restricting raw material supply as steelmakers plan these major capacity additions.

The challenge extends to coking coal, a key input in blast furnace-based steelmaking. India has historically depended heavily on international supplies, but greater investment in coal washeries could allow domestic coal with semi-hard or semi-soft coking properties to be blended with imported coal, improving self-reliance, Acharya said.

A combination of domestic production and imports will remain necessary as India scales up steelmaking, he added. Steelmakers may need to import iron ore of different grades to blend with domestic supplies, depending on iron content and impurities such as alumina and silica. "Self-reliance with some imports can work if you have to go to the 600 million tonnes in the draft policy," Acharya said.

India's steel consumption grew 7.5% in the first half of the current financial year, strengthening the case for capacity additions. Acharya said the country's domestic demand, driven by infrastructure, construction and manufacturing, provides long-term visibility for the sector. "Unless the industry adds capacity in time, supply will lag demand," he said. India's crude steel production was 170 million tonnes in FY26, while finished steel consumption was 164 million tonnes.

Capacity roadmap

JSW's current steel capacity, including overseas operations and joint ventures, stands at 37.9 mtpa, which it expects to expand to about 80 mtpa by 2032.

India's largest steelmaker will also prioritise ongoing capacity expansions at Utkal, Vijayanagar and Dolvi over its proposed green steel project at Salav, as it awaits greater clarity on natural gas availability and renewable energy capacity, Acharya said.

JSW Steel is focusing on brownfield expansions that offer lower costs and can be commissioned in phases. Its Utkal project, with a planned capacity of 10 mtpa, is estimated to cost about ₹48,000 crore, excluding associated pellet plants. Including the latter, the investment would be around ₹55,000 crore, or about $550 per tonne of capacity, Acharya said. The company also plans to complete the second phase of its JSW Vijayanagar Metallics Limited (JVML) expansion of 5 mtpa, alongside the ongoing third phase of expansion at Dolvi to scale capacity from 10 mtpa to 15 mtpa. Slated for commissioning by 2030, these projects will be funded entirely through internal accruals and generate additional cash flows for future growth.

Green transition

The company has planned a 4-mtpa green steel facility at Salav in Maharashtra, based on direct reduced iron (DRI) and electric arc furnace (EAF) technology. The plant is expected to operate on renewable energy and natural gas, with a targeted carbon footprint of less than 0.7 tonnes of carbon dioxide per tonne of crude steel. However, the project will be taken up in phases once the geopolitical situation stabilises and the company has better visibility on gas supplies and renewable energy generation. "We will fix the timeline once we have better visibility on the renewable energy and natural gas required to make the green steel," Acharya said.

The company is also evaluating coal gasification but believes conventional steelmaking routes remain more viable at present. Acharya said coal gasification is capital-intensive, with investment requirements comparable to those of a petrochemical complex, and depends heavily on coal linkages. Instead, JSW Steel is looking to increase renewable energy use, recycle blast furnace top gas and combine internal gas with natural gas to reduce its carbon footprint.

This aligns with comments from Tata Steel CEO TV Narendran, who previously told Mint that the company preferred to consume the gas rather than invest in coal gasification directly due to its capital-intensive nature. In contrast, rivals such as Jindal Steel & Power and ArcelorMittal Nippon Steel India are actively investing in the technology, with the latter exploring a memorandum of understanding with Coal India.

JSW Steel reported a consolidated net profit of ₹5,279 crore for the second quarter of FY27, up from ₹1,623 crore a year earlier, according to an exchange filing last Friday. The Mumbai-based steelmaker reported a 21% year-on-year rise in consolidated revenue to ₹53,697 crore in the quarter.