The Supreme Court on Monday lifted an 18-month old mining ban in Goa, but with riders. The iron ore mining will be restricted to 20 million tonnes annually, the Supreme Court said adding the cap would subject to a final panel report.
The top court also said the mining leases for which renewals were not sought post 2007 have expired and mining there is illegal.
The Supreme Court had banned mining in all 90 mines in Goa from October 2012, due to investigations into alleged illegal mining operations.
The Supreme Court order is significant for Sesa Sterlite, the main subsidiary of mining conglomerate Vedanta. Sesa Sterlite is the largest private sector iron ore producer in India. Its iron ore business, earlier known as Sesa Goa, is based in Goa.
Sesa Sterlite shares jumped 6:5 per cent to Rs. 205 on the BSE, after the news.
“The 20 million tonne cap is in line with expectations. It is obviously positive for Sesa Sterlite…but I don’t expect any production in the next six months. In FY16 there could be significant production,” Bhavesh Chauhan of Angel Broking said.
Other analysts also echoed Mr. Shah’s views on the 20 million tonne cap being in line with expectations.
Sesa Sterlite’s business was adversely affected after the Supreme Court banned mining in Goa. The company reported a negative earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs. 148 crore during April-December 2013.
The ban was based on the findings of the Justice MB Shah Commission report, which estimated a Rs. 35,000 crore loss to the exchequer due to alleged illegal mining over 12 years.