Sesa Goa September Numbers To Be Hit by Mining Bans
DSIJ Intelligence / 10 Oct 2012
Sesa Goa, India’s largest private iron ore producer and exporter, has been a major victim of the mining ban in Goa which contributes more than 85 per cent of the total revenue.
Sesa Goa, India’s largest private iron ore producer and exporter, has been a major victim of the mining ban in Goa which contributes more than 85 per cent of the total revenue. As per the latest press release, the sales volume of iron ore during the September quarter has fallen by almost 90 per cent on YoY basis to 0.2 million tonnes as compared with 1.6 million tonnes. And the sale volume for the first half (six months) has fallen by 47 per cent to 3.1 million tonnes against that of 5.8 million tonnes in the same period last year. The fall in the production and the sales volume will surely impact the financials of the company in the September 2012 quarter. We beleive that company will continue face problems in the coming quarter as it will at least take 2-3 months or more months to resume mining operation in the region.
On October 5, 2012, the Supreme Court ruled that the ban on mining activities in Goa continue, and asked the Central Empowered Committee (CEC) to file a preliminary report in four weeks. Until then, the court has also restricted any movement of ore from mines or stockyard. .
| Sales Volume Sep Quarter 2012 (Million Tonne) | |||||
|---|---|---|---|---|---|
| Particulars | Sep Qtr 2012 | Sep Qtr 2011 | YoY | Jun Qtr 2012 | QoQ |
| Sales Volume Goa | 0.2 | 1.6 | -87.5 | 2.9 | -93.1 |
| Sales Volume Karnataka | 0.01 | 0.7 | -98.6 | 0.01 | |
As per the company’s statement, iron ore operations were affected by the mining ban in Karnataka, a temporary restriction on iron ore extraction in Goa, and transportation restrictions in South Goa during the monsoons.
Karnataka too has been facing a mining ban since August 2011. However, considering the supply constraint in the region last month, the Supreme Court allowed some mines in Karnataka to resume mining in the ‘A category’ 18 mines which are expected to start operations once the mining companies submit their reclamation and rehabilitation plans and complete all the legal procedures to start mining. The CEC has approved the company’s reclamation and rehabilitation plan at a provisional production capacity of 2.29 mtpa and the company is expecting to commence mining in Karnataka, subject to receiving the court’s approval.
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