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Operationalising Codli mine in Goa might add Rs 616 crore to Vedanta’s topline in the current financial year (FY16). The mine has an annual production cap of 3.1 million tonnes per annum (mtpa), which is 60 per cent of the stipulated cap for Vedanta to the tune of 5.5 million tonnes (mt).
Iron ore mining resumed on this mine on Monday, which marked resumption of mineral excavation in Goa after three years. The mine has total estimated reserves of 70 mt.
“We have seven months in hand in the current financial year. During this period, we will definitely achieve 3.1 mt of iron ore output. So, whatever income we generate would add to the turnover of the company,” said a senior company official, who, however, refused to share the actual cost of mining, realisation, and saving.
According to the official, the commencement of mining was needed to reduce fixed cost, which is in excess of Rs 1 crore a day on employees and others. So, whatever realisation the company gets will only reduce its daily fixed costs, the official noted.
Vedanta estimated iron ore price to average at $45 a tonne, a 10 per cent decline from the current prevailing price of $50 a tonne. However, iron ore produced in Goa is largely of low grade with less than 58 per cent of iron (Fe) content. This grade of ore is traded currently at $32-35 a tonne.
