Sesa Iron ore – a subsidiary of Vedanta Resources expects to make its all its mines operational post monsoon.
“Out of the 21 mining leases granted to us by the government, 10 are operational have been ramped up since Aug’15. Post Oct’16, we will have to ramp up the remaining ones,” said Mr. Kishore Kumar, CEO Sesa Goa iron ore.
Environment clearance limit for the company is 5.5 MnT spread over all the leases. It will be important for us to get our small leases also back in operation to achieve the limit, he added.
In FY16, Vedanta produced 2.2 MnT of saleable iron ore from Goa and sales also stood at 2.2 MnT.
Vedanta is a leading Goan iron ore exporter and has exported 1.85 MnT iron ore in first two months of this fiscal.
Thin margins of Chinese steel mills to favour Goan ore
Mr. Kishor Kumar said “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.”
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 raw material, he added.
Steel and raw material prices are going through a price decline. Monthly average index for fines (Fe 62%) has fallen by about USD 9/MT since beginning of this fiscal. Monthly average prices for fines (Fe 62%) remained at USD 60/MT, CFR China in Apr’16 which dipped to USD 51/MT, CFR China in Jun’16 (till 24 Jun’16).
Presently prices of Indian fines (Fe 58/57%) are seen at USD 32/MT, FoB India.
~Sourced
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