Mumbai: India-based iron ore miner Sesa Goa has acquired the mining assets of Dempo Group in the western state of Goa for Rs1,750 crore ($368 million) to boost its output of iron ore.
With the acquisition, Sesa Goa - a subsidiary of London listed metal and mining group Vedanta Resources - will have access to Dempo’s mining leases, rights and infrastructure, the company said in a statement issued late on Thursday.
Sesa Goa is one of India’s largest iron ore producers and exported the majority of its 12 million tonnes production in 2007/08.
In the 2008/09 year ended on 31 March, Dempo produced 3.94 million tonnes of iron ore.
Vedanta chairman Anil Agarwal said the buy-out would help “consolidate our iron ore business” and “achieve great synergy.”
The company said the acquisition would be funded from its existing cash resources, which at the end of March had stood at Rs4,143 crore.
Sesa Goa, which has several mines in India, had earlier said it was eyeing mining assets in India and overseas.
A fall in prices this year on the back of lower steel demand in the world has hurt iron ore producers badly.
Industry sources said some of the 250 or so iron ore mines in India could have cut production or even closed down.