'There is no adverse impact on China sales'

Q&A: P K Mukherjee, MD, Sesa Goa

Vedanta Resources-controlled Sesa Goa exports most of its production to steel makers in China, the world’s largest buyer of iron ore. In a telephonic interview, P K Mukherjee, managing director, talks to Abhineet Kumar on recent developments and the company’s plans. Edited excerpts:

What has been the impact of the ban by China on import of ore having less than 60 per cent iron?
Fewer traders are participating in the tenders we are floating. But, we go into the market and wherever we get the best quotes, we book the sales. Sesa Goa is not yet impacted.

But, has there been any impact on the prices of these varieties of ore? How much of your China sales are accounted by traders?
The price has also not been impacted. In fact, it has gone up by $10 to $12. Our sales of below-60 grade to traders in China is less than 25 per cent of our total sales.

Do you expect some impact of the ban in the current quarter?
Our Q1 will be only up to May 31, as these materials are exported from Goa which stops after May because of the monsoon. Half our May sales are already booked. So, we are quite insulated from any possible impact.

What is the position on reserves and resources?
Our reserves and resources went up to 353 million tonnes on March 31 2010 against 240 million tonnes a year ago. Of this, 70 million tonnes of mineable resources and reserves we acquired through acquisition of Dempo’s properties. So, the net addition in FY10 has been 43 million tonnes. On further expansion, no comment.

What is the progress on the Jharkhand mine?
We are in the land acquisition mode. Once we have the land in our possession, then we will put our mining lease application on a faster track. We have applied for the mining lease. It is not getting moved, so we have not yet invested in the value addition.