London-listed diversified miner Vedanta Resources (LON:VED) announced today a significant drop in its full-year iron ore output, attributed to both a mining ban in India’s southern state of Karnataka and logistical bottlenecks in nearby Goa, which hurt one of its key profit generators.
“We are expanding existing roads and establishing road corridors at Goa to reduce these bottlenecks,” the company said in a statement.
Vedanta’s iron ore production fell 11% year-on-year during its fourth quarter ending on March 31 to 4.9 million tonnes, as full-year production dropped from 18.8 million tonnes to 13.8 million.
At 13:05 GMT Vedanta’s shares were falling almost 5%, trading at US$ 1,872 down from $1,921 at the opening.
The FTSE 100 metals, mining and oil group, which is disputing the ban at India’s Supreme Court, sold almost 1 million tonnes of inventory during the second half of the year through a court-approved auction as the dispute continues.
In February, Vedanta announced it was restructuring its Indian operations to create world’s 7th largest natural resources company. By merging two of its subsidiaries, Sesa Goa and Sterlite Industries, Vedanta created a new corporate entity to be named Sesa Sterlite.
According to a presentation available at the company’s website, Sesa Sterlite will have exposure to zinc-lead-silver, iron ore, oil & gas, copper, aluminum and commercial power with assets in India, Australia, Liberia, South Africa, Namibia, Ireland and Sri Lanka.
The new company expects to double a previously announced capex program in the next three years.
