Jindal Steel becomes largest sponge iron producer - Our Corporate Bureau, New Delhi

Jindal Steel & Power has increased its production to 6.2 lakh tonnes per annum (tpa) from five lakh tpa. Becoming the largest coal - based sponge iron manufacturer in the world.

Jindal Steel & Power Ltd. (JSPL) has also embarked on a Rs 225 crore expansion plan to enhance its power capacity to 150 mw by September next.

At present, the capacity of the power plants is 95 mw JSPL and expects to record a net profit of Rs. 28 crore for the second quarter ended September. A company official told the Financial Express.

The company expects to post a net profit of over Rs. 100 crore for the financial year 2000-2001.

The company registered a net profit of Rs. 27 crore in the first quarter of this fiscal as against Rs. 23 crore in the corresponding period, the previous year. JSPL is also producing power with an installed capacity of 95 mw.

The company is funding the expansion of the power plants with a mix of loans and internal accruals. It has 00000000 Industrial Development Bank of India (IDBI) and ICICI. The balance is from internal accruals. The new power plant of 55 mw min utilise the coal rejects as fuel and power generation would be at a low cost.

The commercial production of the sixth rotary kiln to produce an additional 1.2 lakh tpa commenced on September 28.

JSPL has installed the kiln at a low capital cost of Rs. 25 crore with indigenous technology.

It the kiln was set up by sourcing technology from a foreign company. For example. Lurgn the cost would have been higher at Rs. 100 crore "a company official told the Financial Express. The cost has been funded by internal accruals.

JSPL's cost of production of sponge iron is one of the lowest due to its captive iron ore and coal mines. Iron ore mines of JSPL are situated in Orissa. About 2000 km from the plant and coal mines are 50 km from the plant at Rajgarh. Madhya Pradesh.

The company is selling surplus power to Madhya Pradesh Electricity Board for the nine month period ended march 11, 2000 and made a net profit of Rs. 66 crore.