Sesa Iron Ore, a subsidiary of Vedanta Resources Inc, expects to make all its mines operational in Goa post monsoon.
“Out of the 21 (mining) leases granted to us by the government, 10 are operational have been ramped up since August, 2015. Post-October, we will have to ramp up the remaining ones,” Sesa Goa Iron Ore’s CEO Kishore Kumar told PTI in an interview ahead of Vedanta’s AGM on June 29, in Goa.
Environment clearance limit for the company is 5.5 million tonne spread over all the leases, he said.
“It will be important for us to get our small leases also back in operation to achieve the limit. During the last financial year, our extraction was close to 3.2 million tonne,” Mr. Kumar said.
The mining industry in Goa had come to a standstill for more than two-and a half years following a Supreme Court order to curb illegalities.
Subsequently, the industry was in fear that it would lose trust of its buyers.
Mr. Kumar said the trust on the steel mills, who are buyers for Goa’s low grade iron ore is resuming partially.
Lower price “Goan ore, being low grade, has a lower price. Also, it has got some value in terms of phosphorous material. It does help in a way in terms of marketing this product to China and we will continue to have that edge of cheap raw material for Chinese steel mills,” he said.
“Since the price of steel and iron ore have been slipping over the last six quarters, the advantage remains that margins will remain squeezed for steel mills and they will look out for cheaper row material,” he added.
The CEO further said, “We are in cyclical commodity business. We are going through a rough patch at the moment.
Rough patch Not only us, but the entire world is going through a rough patch in terms of commodity prices being low,” he said.
“We have to do something in terms of ramping up the volumes.
"That would be the logical step in getting our business model right. Demand is there in the market,” Kumar said.
China remains a big market for iron ore from India, he noted.
“There is large demand in China for low grade ore. High grades obviously find their place in Japanese and Korean steel mills and that will continue,” he said.
