Sesa Sterlite Limited
|Traded as||BSE: 500295
|Headquarters||Goa, Karnataka, Odisha - India|
|Key people||Anil Agarwal
(Chief Executive Officer)
|Products||Zinc Lead Oil and Gas Iron ore Aluminium Copper Gold and Silver|
|Revenue||661.52 billion ($11bn)(2014)|
|Net income||103.39 billion (2014)|
|Employees||Approx. 4,100 (2010)|
Sesa Sterlite, a Vedanta Group company is one of the world's largest global diversified natural resource majors, with operations across zinc-lead-silver, oil & gas, iron ore, copper, aluminium and commercial power.
For more than five decades, it has been engaged in exploration, mining and processing of iron ore. The company was founded in 1954, as Scambi Economici SA Goa. Since then, it has grown to be one among the top low-cost producers of iron ore in the world. During 1991-1995, it diversified into the manufacture of pig iron and metallurgical coke. It has also developed indigenous and environment-friendly technology for producing high quality metallurgical coke.
In 2007, it became a majority-owned subsidiary of Vedanta Resources Plc, listed on the London Stock Exchange, when Vedanta acquired 51% controlling stake from Mitsui & Co., Ltd. In June 2009, Sesa Goa Limited acquired VS Dempo & Co. Private Limited (now Sesa Resources Limited) along with its fully owned subsidiary Dempo Mining Corporation (now Sesa Mining Corporation Limited) and 50% equity in Goa Maritime Private Limited. In 2011, Sesa acquired 51% stake in Western Cluster Limited, Liberia.
Sesa Goa Limited’s operations are located predominantly in Goa and Karnataka, with offices in various locations across India. Its head office in India in Panaji, Goa, while its Liberia office is in Monrovia and China office is in Shanghai.
History & Milestones
Scambi Economici Societa Anonyma (SESA), owned by Baron Ludovic Toeplitz, with the financial backing of Alessandro Vassalo, obtained the Orasso Dongor mining lease in Sirsaim, Goa in 1954 and Sesa Goa Limitada was formed. It was bought over in 1955, with equal shareholding, by Gewerkeshaft Exploration e Bergbau and Ferromin S.p.A., a subsidiary of Finsider S.p.A. (of IRI group), which eventually acquired the other half stake in 1963.
Sesa Goa Limitada was incorporated as a private limited company in 1963 under The Companies Act, 1956. In 1979, Sesa Goa Private Limited was formed, with the merger of Sesa Goa Limitada with another mining company in Goa, Mingoa Sociedade Miniera Goesa S.a.r.l. In 1981, Sesa Goa Limited became a public limited company with 60% equity with Indian shareholders. In 1996, Mitsui & Co. Ltd. of Japan acquired Finsider International, along with its 51% stake in Sesa Goa Limited .
In 2007, Vedanta Resources plc, acquired the controlling stake in Sesa Goa Limited from Mitsui & Co. Ltd .
By 1965, Sesa Goa and Mingoa were incorporated as a private limited company under The Companies Act, 1956. The merger happened in 1979 and the new, unified company was called ‘Sesa Goa Pvt Ltd’. The company went public in 1981 with 42,000 Indian shareholders, holding 60% of its shares and the remaining 40% held by Finsider International, which later became ILVA International. Sesa Goa had started with iron mining as its core business but slowly, it ventured into barge construction in 1984 at Sirsaim, located in the Bardez taluka of North Goa. Since then, the barge construction unit has been developed into a shipbuilding division.
Growth in the 90s: In 1992, the first phase of a 150,000 ton pig iron plant was commissioned. In the same year, Sesa introduced India’s first low-phosphorus foundry grade pig iron in India and subsequently formalised the business under pig iron division. The pig iron plant is located at Amona, Goa. This plant has an annual production capacity of 250,000 tonnes per annum. Other alliances were formed in the nineties - in January 1995, Sesa Shipping was launched by acquiring transhipper M.V. Orissa. The year also saw the inclusion of 84 new coke ovens. When Mitsui & Co. of Japan bought Finsider International in 1996, it gained 51% stake in Sesa Go. By 1997, Sesa Kembla became a 100% subsidiary of Sesa Goa.
In 1997, A Narrain mines located in Chitradurga, (Karnataka) were purchased. This mine is currently the company’s second largest mine in India. A Supreme Court directive in August 2011 led to suspension of mining activities in the region. In 1999, Sesa Goa started mining operations in Barbil, which has the fifth largest deposit of iron ore and manganese in the world. They started producing high grade iron ore which was exported from the port towns of Haldia and Paradip.
Along with these business ventures, in 1998, the company started the Sesa Community Development Foundation that supported the NCM Sesa Technical School and a new Sesa football academy. The company promoted SESA F.A.
Mergers and Acquisitions - 2000 onwards: Sesa Kembla completed the creation of an indigenous and environment-friendly technology that produced high-quality metallurgical coke. This technology generated power as a by-product. In 2002, Sesa Group becomes the first business of its kind to be certified with OHSAS 18001. In 2003, the Sesa Goa equity in Sesa Industries was raised to 88.25%, impacting the shareholding pattern.
In 2007, Vedanta Resources Plc, a diversified metals and mining group founded by Anil Agarwal, acquired 51% controlling stake in Sesa Goa Ltd. from Mitsui & Co. Ltd. Vedanta Resources is listed on the London Stock Exchange and a constituent of FTSE 100 Index. The deal was worth 40.7 billion, making it the largest M&A deal in the industry so far. In 2009, Sesa Goa acquired Goa-based Dempo Group’s mining and maritime businesses for 17.5 billion in an all-cash deal. This was the second largest acquisition in India’s iron-ore industry, and it gave Sesa Goa access to Dempo’s 70 million tons of iron-ore mineable resources in Goa. In 2011, Sesa Goa purchased 51% stake in Western Cluster, Liberia for $90 mn. The Liberia Gola Forest Community people who also suffered from the civil war believe that the coming of Western Cluster will help to allievate their sufferin g and provide employment.
Products and Operations
Zinc-Lead-Silver: Zinc India business is owned and operated by Hindustan Zinc Limited (HZL). HZL owns and operates a fully integrated zinc-lead business. HZL is one of the world's largest integrated zinc-lead producers by volume. Sesa Sterlite owns 64.9% of the share capital of HZL, while the Government of India remains an equity partner and holds a 29.5% stake. HZL is listed on Indian stock exchanges (NSE and BSE).HZL's fully integrated zinc operations include five lead-zinc mines, one rock phosphate mine, four hydrometallurgical zinc smelters, two lead smelters, one lead-zinc smelter, four sulphuric acid plants, one silver refinery and six captive power plants at our Chanderiya, Dariba and Zawar facilities in the State of Rajasthan, processing and refining facilities for zinc at Haridwar and for zinc, lead and silver at Pantnagar, both in the State of Uttarkhand and in northern India. In FY 2013, these operations delivered 870,000 tonnes of mined zinc-lead metal-in-concentrate, and 802,000 tonnes of refined zinc and lead
Oil & Gas: Sesa Sterlite's Oil & Gas operations comprise the assets of Cairn India in India, Sri Lanka and South Africa. Cairn India is India's largest private-sector crude oil producer, contributing to over 25% of India's crude oil production. Sesa Sterlite owns 58.9% of Cairn India, which is also the fastest-growing Asian E&P company (Platts 2011) and one of the top 20 independent E&P companies worldwide. Cairn India has a world-class resource base, with interest in eight blocks in India, one in Sri Lanka and one in South Africa. Cairn India's resource base is located in four strategically focused areas - the onshore RJ-ON-90/1 (Rajasthan) block, two blocks on the west coast of India, four blocks on the east coast of India (including one in Sri Lanka) and one block in South Africa. Cairn India's Rajasthan block is the largest onshore discovery in India in the last 20 years and has an estimated 7.3 billion barrels of oil equivalent in place with a basin potential to support a production rate of 300,000 barrels of oil per day. Cairn India has a strong track record of exploration, with nearly 50% exploration success ratio. It has initiated an exploration and appraisal programme to unlock further potential in the proven Rajasthan block. Cairn India has a planned net capital investment of US$3 billion through FY2016, with around 80% of this investment allocated for the Rajasthan block. Cairn India has a current operating capacity of 178,000 boepd at Rajasthan, and remains on track to deliver a FY2013-14 exit production target of over 200,000 boepd. The company has recently commenced gas sales from the Rajasthan Block. Sesa Sterlite's Oil & Gas operations comprise the assets of Cairn India in India, Sri Lanka and South Africa. Cairn India is India's largest private sector crude oil producer, contributing to over 25% of India's crude oil production.
Iron Ore:Sesa Sterlite is largest private sector exporter of iron ore in India and is developing large iron ore deposits in Liberia. Iron ore mining operations are carried out in the Indian States of Goa and Karnataka. We also manufacture pig iron and metallurgical coke. During FY 2013, our Indian iron ore operations were affected by a suspension of iron ore mining activities across the states of Goa and Karnataka. The Honourable Supreme Court allowed resumption of Karnataka mine in April, 13 subject to statutory clearances. Subsequent to receiving all the approvals they have started mining in Karnataka from 28 December, 13. In 2011, Sesa Goa limited had acquired iron ore assets in Liberia, with around 1 billion in reserves and resources across three deposits - Bomi Hills, Bea Mountain and Mano River, located at a distance of 70-140 kilometers from the port at Monrovia. Extensive drilling at our Liberia assets has confirmed a billion tonne of Iron Ore deposit last year with further multifold upside. Currently, they are reviewing the different phased options including the first phase of 2 million tons. Sesa Sterlite is largest private sector exporter of iron ore in India. Its subsidiary, Western Cluster Ltd is developing large iron ore deposits in Liberia.
Copper: they says "We aim to provide high-quality refined copper by improving our operational efficiency and reducing our unit costs" Their copper business is principally a custom smelting operation located in India and Australia. Our Indian operations include a smelter, refinery, phosphoric acid plant, sulphuric acid plant and copper rod plant at Thoothukudi in southern India. Sesa Sterlite owns 100% of the Mt. Lyell copper mine in Tasmania, Australia, which produces a portion of the total requirement of copper concentrate at our Indian Operations. Production of cathodes at our Copper India business was 353kt in FY 2013. Our Australian operations produced 26kt of mined metal in FY 2013.Sesa Sterlite copper business is located in India. It also owns 100% stake in Copper Mines Of Tasmania Pty Ltd, Australia.
Aluminium: BALCO has a smelter capacity of 345 ktpa with capabilities to produce ingots, wire-rods, billets, busbars and rolled products. BALCO's operations include mines, refineries, smelters and captive power plants in the state of Chhattisgarh in India. Sesa Sterlite holds a controlling 51% stake in BALCO, while the Government of India remains an equity partner and holds the remaining 49% stake. The Korba-II Balco smelter produces 245 ktpa of aluminium and they are expanding production capacity to 570 ktpa with the commencement of the new Korba-III 325 ktpa smelter in FY 2014.BALCO's current operations have access to captive power from 540 MW thermal power plant. A new 1,200 MW power plant is expected to commence production soon.
Power: Sesa Sterlite is one of India's leading power producers with a capacity of 3,900 MW in commercial power. They have commercial power generation business which currently operates 2,400 MW Jharsuguda Power Plant in Odisha, 270 MW BALCO power plant in Chhattisgarh, 100 MW MALCO power plant in Tamil Nadu and 274 MW HZL wind power plants at various locations in India. They are also setting up a 1,980 MW Talwandi Sabo power plant in the state of Punjab. Talwandi Sabo Power Limited, a 100% subsidiary of Sesa Sterlite is setting up a 1,980 MW thermal power project in Punjab, with the first unit starting operations by Q3 FY2014. Hindustan Zinc has 274 MW of wind power generational capacity, making it one of the largest producers of wind power in India. MALCO operates a 100 MW plant.
Metallurgical Coke: Approximately 65% of total production is consumed by Sesa group, for its pig iron production. The remainder is sold to customers located in India. Sesa Goa has patented a technology that provides high quality output and produces power. It is a patented and follows a two-product process with metallurgical coke as the main product and the sensible heat of the exhaust flue gas as a co-product. This heat can be used for producing clean electricity. The company uses non-polluting, non-recovery Australian Technology. At the plant in Amona, negative pressure in the ovens ensures no polluting leakages.
Pig Iron: This business is skewed towards catering to the steel mills and foundries of the Indian market, in particular the Western and Southern India. The division manufactures basic, foundry and nodular grade pig iron and also sells slag. The annual production capacity is 250,000 tons per annum.
Sesa Goa’s corporate office is located in Patto Plaza, Panaji. The name of the building is ‘Sesa Ghor’, which means the ‘House of Sesa’. It has two international offices, one each in Shanghai, China and Monrovia, Liberia. In India, 6 offices are located outside Goa – Delhi, Bengaluru, Bhubaneswar, Mangalore, Krishnapatnam and Jamshedpur. In Goa, there are different offices, based on operations. The ship building division is in Sirsaim and River Fleet & Shipping office is in Vasco-da-Gama. The metallurgical coke division is in Sanquelim and the pig iron division is based out of Marcela. The Goa Iron Ore division is in Codli, Sanguem and the Karnataka office is located in Chitradurga.