Mining work at kodolibad to start next year

Kolkata: Electrosteel Casting, which obtained an allotment of iron ore mine at Kodolibad in Jharkhand, is preparing to start mining work sometime next year.

Mr Umang Kejriwal, Managing Director of the company, said that initial estimates suggest that the mine has ore reserves of around 90 million tonnes. “However, this is likely to go up as prospecting and mining operations goes on,” he added.

Mr Kejriwal said that mining operations at the company’s coal block in Jharia area at Parbatpur has started. The steep price rise in iron ore and coal, key raw material for Electrosteel’s direct induction pipe manufacturing, had an adverse effect on its cost of production. During the second half of 2007-08, Electrosteel increased its product prices to pass on a portion of the cost increases.

Adverse movements in the international foreign exchange markets also caused mark-to-market losses for Electrosteel’s forex deals. During the quarter to March 31, 2008, the company provided for total mark-to-market losses of Rs 60.20 crore on its forex exposures.

However, according to the company, things have improved since then and the actual losses are expected to be lower than the figure provided for. On account of FCCB conversion, the company incurred a loss of Rs 9 crore during 2007-08.

For better realisation, the company is now focusing more on the domestic market than exports. During the fourth quarter of 2007-08, the company made a net loss of Rs 20.60 crore against a net profit of Rs 28.23 crore.