Vedanta Resources Plc. subsidiary Sesa Goa Ltd has entered into a definitive agreement to acquire 51 per cent stake in Liberia-based iron ore firm Western Cluster Limited (WCL), for $90 million (Rs 400 crore) in cash, the company has disclosed in a statement to the stock exchanges.
WCL is owned by Elenilto Minerals and Mining LLC, which operates large-scale iron ore, gold, copper and other minerals exploration and mining activities in Africa and Europe. Elenilto has more than 100 exploration and mining licences, with over 10,000 sq km area in Africa and Europe.
Under the deal, WCL will develop the Western Cluster iron ore mining project, which covers mining of deposits exceeding one billion metric tonnes and setting up transportation and shipping infrastructure for its export.
The majority stake acquisition in WCL is subject to approval by the Legislature of Liberia, the statement has added.
“This acquisition will help the company consolidate its iron ore business and presents an excellent opportunity for developing a large integrated mining operation and establish our presence in Liberia and Africa,” Sesa Goa managing director, P K Mukherjee, commented on the acquisition.
WCL has mining assets having long mine-life, with access to potential iron ore resources of over 1 billion tonnes (330 mt saleable product) and close proximity to existing port infrastructure and access to land for railway corridor.
Sesa Goa is India’s largest producer and exporter of iron ore in the private sector. In the fiscal 2011, Sesa Goa produced 18.8 million tonnes and sold 18.1 million tonnes of iron ore. The company is a majority owned and controlled subsidiary of Vedanta Resources Plc., the London-listed FTSE 100 diversified metals and mining major.
Sesa Goa has mining operations in Goa and Karnataka while it also operates a 280,000 TPY metallurgical coke plant and a 250,000 TPY pig iron plant in Goa.
On the Bombay Stock Exchange, shares of Sesa Goa last traded at Rs 241.25, down 3.17 per cent in a weak Mumbai market on Monday.