Companies

Sesa Goa iron ore output may hit 23 mt

Suresh P. Iyengar Mumbai | Updated on April 28, 2011

ironore

Sesa Goa, part of the Vedanta Group, expects its iron ore production to touch 23 million tonnes in this fiscal against 19 million tonnes achieved last financial year.

Mr P.K. Mukherjee, Managing Director, Sesa Goa, said the company is confident of achieving the targeted growth of 15-20 per cent, if there are no export restrictions in Karnataka as the demand continues to remain vibrant.

Following the Supreme Court dictate, the Karnataka Government recently allowed iron ore miners to resume exports. The State Government had imposed an export ban in July last year to curb illegal mining.

“Exports from Karnataka will determine our growth in the coming quarters. We do not see any problem as the Supreme Court has clearly stated that the export ban cannot be imposed forever,” he added.

India is world's third largest iron ore exporter behind Australia and Brazil. A major portion of iron ore exports from India goes to China, which is ranked as the largest steel producer in the world.

The company's strong focus on exploration activities in Karnataka and Goa has yielded significant reserves and resources accretion. It has added 53 mt of reserves and resources last financial year. Sesa's resources fell by 21 mt to 253 mt in FY'11 after closure of Orissa Mine since November 30. With the new accretion, total reserves and resources of the company stood at 306 mt as of March 31, 2011.

Bellary Steel assets

On the Supreme Court case against acquisition of Bellary Steel assets, Mr Mukherjee said the properties of the under construction plant along with 700 acres of free-hold land and other assets of the steel plant has been transferred to Sesa Goa as of March 22. JSW Steel has moved the Supreme Court against the Rs 220-crore acquisition and the Court ordered a status quo on April 18.

“The Court has given us and IFCI three weeks to respond to JSW Steel's petition and we are confident that justice will be done,” he said.

The company's cash reserves has depleted from Rs 10,700 crore to Rs 4,100 crore after acquiring 10.4 per cent stake in Cairn India from Petronas International Corporation at Rs 331 a share. Sesa Goa will require about Rs 13,600 crore if its open offer for 20 per cent of Cairn India is fully subscribed. “We will decide on the Cairn open offer funding after it closes on April 30,” he said.

The company's shares were down 0.17 per cent at Rs 319 on Thursday.

Published on April 28, 2011

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