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Sesa Goa, a Vedanta Group firm, has scaled down its sales volume guidance for the year to 15-16 per cent from the earlier projection of 25 per cent amid uncertainty over the resumption of iron ore exports from Karnataka and logistical issues in Goa.
“This is the first time that we are reversing our growth estimates as various restrictions, particularly the export ban in Karnataka, coupled with restrictions of logistics on public roads of Goa... 20 to 25 per cent growth is not possible, it may be 15 to 16 per cent,” the company Managing Director, Mr P.K. Mukherjee, said during an investor call today.
He added that despite the Supreme Court lifting the ban on iron ore exports in April, the Karnataka Government is yet to issue permits for transportation of iron ore from the State and this has led to uncertainty in the markets.
The Vedanta Group firm, which posted a consolidated net profit of Rs 840.59 crore for the April-June quarter, expects to sell its entire output of iron ore from Karnataka in the domestic market during the current fiscal.
“We are targeting to sell it in the domestic market due to the uncertainty... We will increase supplies to steel plants in Karnataka when our sinter plant gets commissioned in December,” Mr Mukherjee said.
Sesa Goa has pegged iron ore production in the current fiscal at about 22 million tonnes, of which 7 mt will come from Karnataka, while 15 mt will be produced from its mines in Goa.
The Sesa Goa Managing Director added that its operations have not been affected due to the controversy over illegal mining in the southern state, as its operations are in Chitradurga district, whereas the Bellary-Hospet area is under investigation.
Talking about iron ore sales volumes, which fell by about 12 per cent during Q1 this fiscal to 4.3 million tonnes, he said it was primarily due to the termination of a third party mining agreement in Orissa and logistical constraints in Goa.
“Due to this, our sales were down by 60,000 tonnes,” Mr Mukherjee said.
The largest private sector iron ore miner also said that its expansion plans in Karnataka are on track.
“We expect to commission the pig iron capacity of 625 kilo tonnes per annum (ktpa) and the associated expansion of metallurgical coke capacity to 560 ktps by the end of this calendar year,” he said.
He added that the proposal to expand iron ore production capacity to 10 million tonnes per annum in Karnataka is at “much advanced levels” of clearance with the Government.
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