Vedanta's Sesa Goa unit swings to full-year loss

Sesa Goa, India's largest iron-ore producer part-owned by mining giant Vedanta Resources, swung into the red in the year to March 31st as operations were hit by suspensions.

The company swung to net loss of 131 crores (£15.6m) from a profit of 2,108 crores (£251m) the year before as a ban on iron-ore mining in Karnataka and Goa pushed sales volumes down 80%.

In the final three months of the financial year (ended March), the company recorded no sales of iron ore and had to rely on sales of pig iron, metallurgical coking coal and power to contribute to the top line.

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Net sales in the full year dropped 69% from 8,275 crores to 2,554 crores and were down 90% in the fourth quarter alone.

Earlier this month (after the financial year had ended), Sesa Goa received a green light for the resumption of mining in Karnataka but is still waiting for an initial hearing regarding operations in Goa.

Despite the mining bans, the firm still said that it had "another year of significant reserves and resources accretion" in the two regions. Reserves and resources in India were increased from 374m to 433m tonnes over the year.

Sesa SterliteSesa Goa is currently waiting to give a completion date for its merger with Vedanta's Indian copper subsidiary Sterlite.

The merger, as part of the parent group's "consolidation and simplification", has now received the approval of the High Court of Bombay.

Vedanta has said that the new entity, named Sesa Sterlite, will be India's natural resources "champion" and is expected to become the seventh largest global diversified natural resources major in terms of earnings.

Sesa Sterlite will be listed in India and with American Depositary Shares (ADS) listed on the New York Stock Exchange.

Vedanta's share were up 0.66% at 1,229p in early trading on Monday.