Miners welcome SC verdict, stocks down

The much-awaited verdict by the Supreme Court on Thursday lifting the one-and-half year old ban on category A and B mines in Karnataka has been welcomed by miners who said that economic activity in the state would get a fillip.

In a statement, the Joint MD and Group CFO of JSW Steel, Seshagiri Rao said: “This relief provides breather to the steel industry in the region and assists in providing of direct and indirect employment...at a time when the steel industry was at the brink of closure due to non-availability of iron ore.” He added that the decision will spur investments in the steel sector in Karnataka.

Similarly, MSPL, an iron ore mining, processing and exporting company, also saw it as a “step in the right direction.” The ED of the company, Rahul N Baldota said: “We had stopped our mining operations since January 2009 and this is a big relief. The resumption of mining operations will help in mining sector’s contribution to GDP and improve socio-economic conditions in Bellary district.”

Analysts also see it as positive development. “The eventual commencement of production from category “B” mines will also be positive for JSW Steel. However, we were factoring the commencement of mines during H2, FY2014,” said senior research analyst at Angel Broking, Bhavesh Chauhan. The stock touched a high of Rs 745.80 on the BSE, but closed at Rs 716.90, down 2.2 per cent from its previous close.
The company had put on hold expansion plans to increase its Vijayanagar (Karnataka) plant capacity from 10 MTPA to 12 MTPA, waiting for “iron ore situation to improve,” Seshagiri had said few months back.
Vendata group company Sesa Goa, which has a minimal presence in Karnataka, saw its share price go up 0.90 per cent after the verdict and closed at Rs 150.65.
DH News Service