It has taken a mere three years or so for this script to go awry.
Media reports from India are now talking about plans by Sesa Sterlite Ltd. (SSLT) to cut its iron ore project in Liberia on the African continent by as much as 80 percent following project-related approval delays, among other reasons.
For those of you who have joined in this story late, SSLT, which is India’s and perhaps even the world’s largest diversified natural resources company, came about from a merger of Sterlite Industries (India) Limited and Sesa Goa Limited. Part of the global Vedanta Group, the consolidation was completed in August 2013, officially creating Sesa Sterlite Ltd.
It was some time in 2011 that the then-Sesa Goa, India’s largest private-sector producer and exporter of iron ore, had shown an interest in Liberia’s mines for an iron ore project.
MetalMiner had reported that development and talked of how in August 2011, Sesa had acquired a 51-percent stake in Western Cluster Limited, Liberia (WCL), which held mining interests/rights in the Western Cluster iron ore project in Liberia for about US $82.2 million. The Vedanta group miner had claimed then that WCL had potential reserves and resources of over 1 billion metric tons.
For a few years after that, as followed up by MetalMiner, Sesa Goa had continued to boldly march down the Liberia acquisition road – its first international foray after a court in India had ordered a mining ban in the ore-rich state of Goa where Sesa was located.
Now, it seems, this perceived smooth road has turned into a bumpy ride. A report put out earlier this week by news agency Bloomberg said SSLT was contemplating cutting the iron ore project there because of procedural delays and also because its cash flows had turned to a trickle following the mining ban in India.
The news report did not name any official of the company, simply saying three officials close to the project had talked of the reduction plan. The initial capacity at the Western Cluster mines may be slashed to 400,000 metric tons a year from 2 million tons, and an announcement to this effect was coming soon.
Sesa, India’s most valuable metals producer, based in the western state of Goa, had expected to ship its first consignment from Liberia last month and spend US $2.4 billion to reach 30 million tons by 2017.
To be continued in Part Two.