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Iron ore shortage: Sesa Goa to shut two plants

The company has said the plants are being stopped as they are not able to get iron ore from Sesa's own Codli mines in South Goa after the district collector stopped transportation of ore, pointing out to the accidental conditions on roads during monsoon.

twitter-logoPTI | July 13, 2012 | Updated 13:22 IST

Sesa Goa, a subsidiary of Vedanta group, has decided to shut down operations at its two plants in Goa because of scarcity of iron ore as its transportation has been stopped by authorities due to monsoons.

The closure is imminent within next 24 hours as the raw material stocks of iron ore are running dry, a company spokesman here said.

He did not specify for how long the operations will be impacted.

The Pig Iron Plant (PIP) and metallurgical coke plant situated in Amona village of Bicholim taluka are slated to be shut down, he added. The two plants employ 1,200 people.

The company has said the plants are being stopped as they are not able to get iron ore from Sesa's own Codli mines in South Goa after the district collector stopped transportation of ore, pointing out to the accidental conditions on roads during monsoon.

"Sesa's plants have been running since 1992 without stopping for a single day," the spokesman said.

"For last one year, the supply of iron ore from Karnataka has also become scarce and very costly due to closure of all mines there as per the Supreme Court order and stocks getting sold in e-auction," he added.

The closure is expected to affect the power supply to the state, as state government buys 14-16 MW power from Sesa Goa's gas-based power plant.

It may also impact expansion plans, the spokesman said.

The company's expansion is aimed at almost doubling its capacity from the existing 2.8 tonnes of met coke.

"Sesa has invested about Rs 650 crore which, incidentally, is the single largest investment in a manufacturing facility in Goa in last 4-5 years. The new plant is ready for commissioning any day now," the spokesman said.

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