The Government has decided to split the Chiria iron ore mines into two reserves. After the split, SAIL will be entitled to around 1billion tonnes of iron ore reserves, out of the estimated 2 billion reserves at the Chiria mines.
The Chiria iron mines are important in the wake of SAIL’s capacity expansion plans as company is going to expand its steel making capacity from 12.5million tonnes to around 21million tonnes.
We believe that this is a positive development for the company, as it will get assured linkages for its expansion plans. We maintain a NEUTRAL view on the stock.