Sesa Goa eyes Brazilian iron ore mine

India's largest iron ore exporter, Sesa Goa, is looking at 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, according to reports.

The mine, owned jointly by geologist Joao Carlos Cavalcanti of GME4 and Banco Opportunity, has reserves of 800 million tons and is valued at about $2.4 billion.

The company reportedly said that it keeps looking at all opportunities even in this case and it will evaluate all factors before taking any final call.

Sesa Goa, part of London Stock Exchange-listed Vedanta Resources, has cash reserves of about Rs4100 crore billion and is keen to expand abroad. GME4 is expected to start a global road show soon to sell the majority stake in the mine, which is located in the north-eastern state of Piaui.

Iron ore accounts for about 65 per cent of the total cost in steel making and ownership of ores would reduce costs for making steel. But Sesa Goa managing director P K Mukherjee is reported to have said that one of the major factors before making any decision in Brazil is the logistics cost. ''Brazil has adequate iron ore mines, but logistics is not always convenient,'' he added.

Meanwhile, Sesa Goa has reported a 31 per cent rise in its net sales and income from operations at Rs4925.70 crore in the year ended 31 March 2009 against Rs3765.89 crore in the previous year. The net profit after tax has risen by 29 per cent to Rs1988.13 crore from Rs1541.58 crore. The company has announced a dividend of Rs2.25 per equity share of Re1 each.