Sesa Sterlite rallies as Goa approves mining lease renewal

MUMBAI: Shares of Sesa Sterlite rallied over 3 per cent in early trade following reports that the Goa government has given approval for renewal of all mining leases.

The company expects to resume mining after getting environment clearance and other regulatory approvals.

The state government had banned all mining activities in 2012.

Sesa Sterlite had production capacity of 15 million tonne in Goa before the ban. It may now be allowed to produce approximately 10 million tonne of iron ore.

However, the exports seem to be unviable for the company due to sharp fall in global commodity prices. Iron ore prices have fallen to $65 per tonne vs $160 per tonne last year. The slump in iron ore prices is likely to keep businesss muted for the company.

The high export duty and royalty charges are expected to keep margins low. The company exported majority of iron ore mined from Goa.

At 10:10 a.m.; the stock was at Rs 203.65, up 2 per cent, on the NSE. It touched a high of Rs 206.80 and a low of Rs 202.10 in early trade.