Three Indian steelmakers vie to buy Sesa Goa iron company

11 April 2007

Goa, India, 11 April – Three Indian steelmaking companies, including Arcelor Mittal, have presented proposals to buy 51 percent of iron ore company Sesa Goa, a deal which is expected to total over US$1 billion, according to a report in the Indian newspaper the Economic Times Tuesday.

As well as Arcelor Mittal, the Aditya Birla and Anil Agarwal groups have also presented proposals to buy a majority stake in the Goan company, which is the biggest private Indian exporter of iron ore.

The stake is being sold by Japan’s Mitsui, which may announce the winner this week.

The Economic Times said that the biggest offer was made by Arcelor Mittal (US$51.4 per share), followed by the Birla group (US$48.9 per share).

Iron ore giants BHP Billiton, Rio Tinto, Brazil’s Companhia do Vale do Rio Doce (CVRD) and JSW Steel did not present proposals as had previously been reported in the local press.

The steelmakers plan to gain access to iron ore, thus reducing production costs at a time when the price of iron ore have reached a five-year high on the international market, due to increased demand from China.

It is estimated that Indian iron ore reserves are the world’s fifth largest and Goa’s ore is recognized for its quality.

Sesa Goa has annual production of nearly 9 million metric tons of iron ore, and its main customers are China and Taiwan (58 percent of the total) and Japan (11 percent). (macauhub)