Sesa Goa, a Vedanta Group company, has stopped iron ore mining at Chitradurga in Karnataka. The Supreme Court on Friday had banned mining activities at Chitradurga and Tumkur districts. A similar ban on mining is already in force at Bellary in the State.

“In view of the (Supreme Court) order, the mining activities in the company's mine in Chitradurga of Karnataka will have to be stopped with immediate effect and thus it will affect to some extent the performance of the company,” Sesa Goa, one of the largest exporters of iron ore, said in a statement.

The Chitradurga mine of Sesa Goa has annual permitted production capacity of six million tonnes. Besides Karnataka, the company has two mines in operation at Codli (in South Goa) and Sonshi (in North Goa).

The iron ore mining ban in Karnataka and logistics constrains in Goa have pulled down the company's iron ore sales by 12 per cent to 4.3 million tonnes (4.9 mt) in the first quarter of the current fiscal.

Given the current turbulence in the mining sector, the company last month scaled down its annual production target by 15-18 per cent against 20-25 per cent fixed in April.

It produced 18.80 million tonnes of iron ore last fiscal. As of March 31, 2011, the company had total reserves and resources of 306 million tonnes.

LOOKING OVERSEAS

The company recently acquired a major stake in Western Cluster, a Liberian iron ore mining company, for Rs 400 crore in an all-cash deal.

Sesa Goa will jointly develop the Western Cluster iron ore mining project, which covers mining of deposits, and setting up transportation and shipping infrastructure for export.

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