Dec 21, 2012 06:26 PM IST | Source: PTI

Sesa buys balance 49% in Liberia project for $33.5m

Vedanta-Group firm Sesa Goa on Friday said it has acquired remaining 49-percent stake in Liberia's Western Cluster's project for USD 33.5 million (about Rs 185 crore).

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Vedanta-Group firm Sesa Goa on Friday  said it has acquired remaining 49-percent stake in Liberia's Western Cluster's project for USD 33.5 million (about Rs 185 crore).

"Sesa Goa has acquired the remaining 49 percent of the outstanding common shares of Western Cluster Ltd (WSL) from Elenilto Minerals & Mining LLC Delaware, for a cash consideration of USD 33.5 million," the company said.

Post this transaction, Sesa's shareholding in WCL rose to 100 percent. The company had acquired 51 percent stake in WCL for about USD 90 million (about Rs 411 crore) last year.

"WCL is a logical and strategic fit with Seas's existing iron ore business and is expected to create significant long-term value for all stakeholders," the company said in the filing to the Bombay Stock Exchange.

It added that at WCL, exploration activities were progressing well, with over 42,000 metres of drilling completed till November 30, 2012. The project is on track for first shipment in FY14, it said. In November, the company had said it will finalise the capital expenditure plan for first phase of its Liberia iron-ore mining project by January.

The company is aiming to produce 10 million tonnes of iron ore per annum in the first phase from WCL. Sesa Goa's managing director PK Mukherjee in November had said the company completed over 31,000 metres of drilling at the project site and first shipment from the project will be delivered in 2013-13 as announced earlier.

On the back of higher-than-estimated iron ore reserves of 1 billion tonnes, the Goa-based miner also has plans to ramp-up the production by up to 30 MT in the second phase, which is expected to begin by 2016-17.The company had begun exploration of the asset during April-May and had said that it would be spending about Rs 400-450 crore on the project this year.

The investments would be made largely on payments to the local government, exploration, equipment and other related studies for the project. During the last quarter, the iron-ore miner's net sales, at Rs 294 crore, had gone down sharply due to host of reasons, including a ban on mining in Goa and slump in iron ore prices.

However, it had reported a better-than-expected net profit at Rs 522 crore, largely due to Rs 464.63-crore profit for its 20 percent holding in associate firm, Cairn India.

At 1500 hours, Sesa Goa's shares were trading at Rs 195.25, down 2.06 percent from their previous close on BSE.

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