January 25, 2013 / 12:16 PM / 5 years ago

UPDATE 1-Sesa Goa to start Liberia iron ore output early 2014

(Adds details, quotes)
    By Siddesh Mayenkar
    MUMBAI, Jan 25 (Reuters) - Indian iron ore miner Sesa Goa
Ltd expects to start production at its mine in Liberia
in early 2014, as it seeks to offset the impact of mining bans
at home.
    India was once the world's third-biggest exporter of iron
ore, mainly to China. Sesa Goa, owned by Vedanta Resources
, used to ship about 15 percent of those exports. 
    However, mining bans in the western Indian state of Goa and
the southern state of Karnataka have hit production, triggering
a 28-percent drop in Sesa Goa's net profit to 4.97 billion
Indian rupees ($93 million) in the quarter ended December.
    "We are committed and expect to deliver the first shipment
(from the mine in Liberia) in the last quarter of FY14 (fiscal
2013-2014) ... everything is progressing satisfactorily,"
Managing Director P.K. Mukherjee said.
    Sesa Goa's financial year starts on April 1. 
    The company had completed 48,000 meters of drilling at the
Liberian site as of December last year. Its initial production
target for the mine is 4 million tonnes per annum (MTPA). 
    Sesa Goa expects to get permission to re-start mining
operations at its 2.3 MTPA mine in Karnataka, shut by the
Supreme Court in July 2011, in the near future.
    The court banned mining in Goa and Karnataka after
allegations of illegal mining.
    "The moment we get the clearance from the Supreme Court, we
will put (in) our first shovel," said Mukherjee, adding he aimed
to produce 400,000-500,000 tonnes of iron ore per day from the
Karnataka operations, whose case hearing is scheduled next week
in the top court.
    Sesa Goa said about 3.5 million tonnes of China-bound iron
ore was lying unsold in Goa, after the court ordered the ban
along with restrictions on movement of material.
    Mukherjee estimated India's iron ore exports would fall to
around 27-30 million tonnes this financial year, compared with
an annual average of 100 million tonnes, and said South African
and Australian miners were moving in to fill the gap. 
    "It will be (a) hard task to regain that market ...
Australians and South Africans are happily going to the banks,"
he said.
    Analysts say India has lost vast swathes of its $15 billion
of iron ore exports to overseas players like Vale,
Rio Tinto  and BHP Billiton .
    ($1 = 53.6950 Indian rupees)

 (Editing by Mark Potter)
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