Sesa Goa Limited Annual Report 2011

Met Coke

21

Business Review Corporate Governance Financial Statements

Sesa Goa's met coke division is operated as an independent business unit. The business is primarily a backward integration initiative to support the pig iron operations 70% of the met coke output was consumed internally in 2010-11. The met coke plant at Amona produces a range of coke fractions from over 70 mm for foundries, 20 mm to 60 mm for blast furnaces, and 6 mm to 25 mm for the ferrous alloy industries. The product is mainly of low ash coke. The principal input, low ash coking coal, is imported. To ensure stable raw material supply, the Company enters long-term procurement contracts. Coking coal is carefully blended with accurate controls to produce the desired high quality low ash met coke, using the costeffective proprietary Sesa Energy Recovery Coke Making Technology. This process produces high quality met coke, and has the lowest

pollution levels among comparable technologies. There was moderate growth in production and external sales. However, prot margins increased signicantly due to higher sales realisation with an increase in global prices of met coke. Sales volume (internal & external) was at 252,074 MT in 2010-11. External sales revenues increased by 6% to ` 152 crore in 2010-11. Prots before interest, tax, dividends and other nonrecurring or non-allocable incomes for the met coke business increased by 161% to ` 89 crore in 2010-11. In line with the expansion of the pig iron facility, the Company is also expanding its met coke production

capacity by another 280,000 MT per annum, which will increase the total production capacity to 560,000 MT per annum. Sesa Goa has developed a technology for energy recovery in coke making. This is environment friendly, characterised by low capital and operating costs, high levels of energy recovery, and has the capability to produce high quality metallurgical coke. The Company has received a European and an Indian patent for this technology. In addition, the Company has introduced a German technology for densication of coal charge, employing vibro-compaction for producing stable coal cake with bulk density. The met coke division has also set up a state-of-the art coal carbonisation laboratory for coal characterisation and evaluation of coke quality.