Vedanta group firm Sesa Goa is targetting to produce 10 million tonnes of iron ore in the first phase of production from Liberia's Western Clusters project on the back of higher-than-estimated reserves.
"Drilling is going on full swing, every where we are getting positive signs. By the end of 2013-14 financial year, we will make the first shipments. We have divided the project into two phases and in the first phase, production target is of 10 million tonnes," Sesa Goa Managing Director P K Mukherjee told PTI.
The Goa-based iron ore miner had acquired 51% stake in a project in Liberia (in West Africa) last year for about $90 million (Rs 411 crore). This was the first overseas acquisition of the company.
Mukherjee added that the reserves at the Liberian project are likely to be three times higher than original estimates of one billion tonnes and the company would ramp up production from the project by up to 30 million tonnes in the second phase.
"The reserves are higher, may be three times more than original estimates... During the second phase, it (production) would get ramped up to 30 million tonnes. The second phase production will begin 2-3 years after 2013-14, so by 2015-16 or 2016-17 it should happen," he said.
The iron ore miner, which had begun exploration of the asset during April-May this year, is planning to invest Rs 400-450 crore on the project this year.
The Sesa Goa MD, however, said that capital expenditure plan for the project is still underway and this year's money will largely be spent on payment to the local government, exploration, equipments and other related studies for the project.
"This financial year, we are expecting total cash flow of Rs 400-450 crore (on the project) but that does not mean it is the total capex. The total capex will be much higher," he said, adding that a decision on capex will be taken by December.
Talking about Sesa Goa's plans to set up a steel mill in Jharkhand, Mukherjee said that the company is looking to sign a memorandum of understanding (MoU) for the project with the state government in a month's time.
The company, which is planning to set up a steel plant of 1.5 MT per year capacity in the mineral-rich state, has started acquiring land for the project on its own, he said, though he did not reveal the investment plans for the project.
Sesa Goa already has a prospecting licence of an iron ore mine in West Singhbhum district of the state for carrying out mining operations.
