Sesa Goa ventures into steel making with Bellary Steel buyout
The acquisition of Bellary Steel and Alloy Ltd (BSAL) assets will enable Sesa Goa, one of the largest producers and exporters of iron ore, to enter much value added business segment of steel making, particularly when the Government is discouraging iron ore exports from the country.
BSAL assets include an under-construction steel plant of 0.5 mtpa with free hold land of 700 acres, building and structures, plant and machinery and other assets which have been transferred on an “as is where is” basis to Sesa Goa as of March 22.
Sesa Goa is at present conducting a detailed assessment in order to determine the best way forward for commissioning the steel plant at the earliest, said the company's press release on Tuesday.
Located in iron ore-rich belt of Karnataka, BSAL provides Sesa an opportunity to expeditiously set up a value addition facility, with about 700 acres of freehold land. The project is in close proximity to the national highway, the railways and water sources.
Mr Mukherjee, Managing Director, Sesa Goa, said, “We have been looking at setting up value addition facilities, as desired by Karnataka Government, and this acquisition provides us with an excellent opportunity to leap frog ahead in that direction. This acquisition also substantiates our firm commitment in Karnataka.”
Over the last two decades, Sesa Goa has diversified into the manufacture of pig iron and metallurgical coke. Sesa has mining operations in Goa and Karnataka, while it also operates a 280,000 tonnes per annum metallurgical coke plant and a 250,000 tonnes per annum pig iron plant in Goa.
Sesa Goa has been facing difficulty in doubling its mining capacity to 50 million tonnes by March 2013, after Karnataka banned iron ore exports in July last year.
The Government has recently increased export duty on iron ore to discourage shipments and to augment supply to the domestic steel producers.