Sesa Goa eyes control of Brazilian mine.

22 Apr 2009 Evaluate

Sesa Goa, India’s largest iron ore exporter, is exploring options of bidding for the controlling stake in an iron ore mine that has been put on the block by Brazil’s mining exploration company GME4. The mine, owned jointly by geologist Joao Carlos Cavalcanti of GME4 and Banco Opportunity, has reserves of 800 million tonnes and is valued at about $2.4 billion.

Sesa Goa, has cash reserves of about Rs 4,100 crore and is keen to grow its presence. GME4 is expected to start a global roadshow soon to sell the majority stake in the mine which is located in the north-eastern state of Piaui. Three years ago, GME4 had sold iron ore mine in the neighbouring state of Bahia in Brazil to a representative of steel tycoon Lakshmi Mittal for $360 million.

 

Benchmark contract prices for iron ore for FY2010 is expected to be at $65 per tonne, compared to $85 in FY09. The settlement price of iron ore is vital as it would give an indication of the likely trend for steel prices, which in turn sets the pace for pricing of consumer goods and cars.

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