Sesa Goa may start importing iron ore to run pig iron plant

Vedanta group firm Sesa Goa today said it may have to resort to imports of iron ore for feeding its 6.25 lakh tonnes pig iron plant in Goa due to a mining ban in the state.

Incidentally, Sesa Goa is the largest domestic iron ore miner and had sold 16 million tonnes of iron ore in 2011-12.

However, since the imposition of mining ban in Goa in September this year, its production has come to naught.

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As such, the company does not have adequate iron ore to run its own pig iron plant which may force Sesa Goa to either shut down blast furnaces or go for imports to feed the plant, P K Mukherjee, Managing Director, Sesa Goa, told PTI.

"With no mining in Goa, we will have to resort to imports to keep our pig iron plant running and the days are not to far," he added.

The Goa Government had ordered a temporary suspension on extraction of ore across the state on September 11, pending verification of various approval documents in view of the findings of Justice M B Shah Commission on illegal mining.

On 5 October 2012, the Supreme Court ordered a suspension on mining activities in Goa, including transportation of mined ore from mines or stockyards and asked the Central Empowered Committee to file a preliminary report in four weeks.

Mukherjee said Sesa Goa, which sold 16 million tonnes of iron ore in last fiscal from its mines in Karnataka and Goa, has not produced even a single tonne after the temporary ban was imposed on iron ore mining in Goa.

The company, in August, had increased its pig iron making capacity to 6.25 lakh tonnes (LT) per annum from the earlier capacity of 2.5 LT in a year.

Pig iron is an intermediate product of smelting iron ore and has two major types -- basic grade, which is used for steel making and foundry grade, which is used for making iron castings. It requires around 1.6 million tonnes of iron ore to make one million tonne of pig iron.

Sesa Goa's revenues have tumbled ever since a mining ban was put in place by the Supreme Court in Karnataka last year as this had led to closure of operations in the Southern state.

In last fiscal, it had reported Rs 2,108 crore net profit on a net sales of Rs 8,275 crore.

The company is now hoping to get an approval to resume its operations in Karnakata, where rehabilitation and reclaimation plan for its mine at a reduced capacity of 2.29 MT has been approved by the CEC.

Sesa Goa's mine in Karnataka, which comes in Category-B of CEC categorisation, had potential to produce six MT iron ore in a year.