Sesa Goa to invest $400 mn in Liberian mine in 2-3 yrs
Vedanta group firm Sesa Goa is looking at investing up to USD 400 million on its Liberian iron ore mining project in 2-3 years.
New Delhi: Vedanta group firm Sesa Goa is looking at investing up to USD 400 million on its Liberian iron ore mining project in 2-3 years.
It is gearing up to complete the first phase of mining in the West African nation by December, 2014.
"We have invested about USD 35 million so far and have plans to spend about USD 100 million this year. That is cash flow I am talking about... In next 2-3 years, we will invest anything between USD 250 million and USD 400 million," Sesa Goa's Managing Director P K Mukherjee said.
The investment will be made on completing the first phase production target of 2 million tonnes per annum (MTPA) by December, 2014, and partly on works related to phase-II of equal capacity.
Sesa Goa, which had acquired Liberia's Western Clusters project for about USD 123.5 million (about Rs 595 crore), has divided the project into several phases and has plans to ramp up production up to 30 MTPA by 2016-17.
However, it will depend on market conditions, Mukherjee said, adding that company is on track to delivering the first shipment of iron ore from the project by March.
It has also started looking for potential buyers, with Europe and Middle-East countries as nearby markets.
Till June, it had completed drilling of 91,500 metres across the three deposits - Bomi, Bea and Mano River of the Western Cluster Project. Last year it had added 966 million tonnes of reserves and resources.
It has also been developing logistics capacity of 20 MT for evacuation of iron ore from the mines.
Since September 2012, Sesa Goa has been facing turbulent times due to mining ban in Goa and non-resumption of its operations in Karnataka, where the mining lease has expired.
The company, which has a mine in Karantaka's Chitradurga district and has the permission to mine 2.29 million tonnes of iron ore, is awaiting forest clearance from the Ministry of Environment and Forests. After that, it can begin mining there on a deemed basis, till its mining lease gets renewed. The Forest Advisory Committee of MoEF has already recommended forest clearance.
"We are expecting letter from MoEF to state government to flow very soon but we cannot predict when it will happen. I am hopeful of resuming mining in the second quarter," Mukherjee said.
For the April-June quarter, it has posted 57 percent dip in consolidated net profit at Rs 414.30 crore, while its net income from operations had declined by over 79 percent to Rs 360.66 crore as its iron ore mining operations are closed.
The company managed to remain profitable in the quarter largely on account of Rs 625.45 crore profit coming from its associate firm and oil major Cairn India. Sesa Goa holds 20 percent stake in the oil major.
Otherwise, it would have been consolidated net loss of Rs 211.15 crore in the quarter.