Tata Steel, SAIL restart iron ore mines in Odisha on new permits1 min read . Updated: 02 Jun 2014, 08:53 PM IST
Mines secretary says 8 mines, including Tata Steel, SAIL and Orissa Mining Corp. have resumed iron ore extraction
Mumbai: Tata Steel Ltd. and Steel Authority of India Ltd. (SAIL), India’s top producers, restarted most of their iron ore mines in Odisha after getting new permits from the state government. The shares surged.
“Eight mines, which have an annual combined capacity of 20 million metric tonnes and received new mining leases, have resumed ore extraction," G. Srinivas, the mines secretary at the Odisha government, said on Monday in a phone interview. “These include four mines of Tata Steel, three of SAIL and one belonging to Orissa Mining Corp. Ltd."
The Supreme Court on 16 May ordered suspension of mining at 26 quarries, pending renewal of extraction leases from the state government. The court gave six months to the state to dispose all applications for renewing permits and asked it to first process the applications for mines owned by steelmakers.
“The restart is very positive and has come much before our expectations," said Rahul Jain, a Mumbai-based analyst with CIMB Securities India Pvt. Jain has an add rating on Tata shares and a hold rating on SAIL. “Their costs won’t rise as they needn’t buy from outside."
The shares of Mumbai-based Tata Steel gained 3.8%, the most since 14 May, to Rs492.90 at the close in Mumbai. New Delhi-based SAIL increased 4.7% to Rs91.65. The benchmark S&P BSE Sensitive Index rose 1.9%.
“We have ensured that the biggest mines have started and this will improve supplies," Srinivas said from Bhubaneswar. The restarted mines constitute two-thirds of the capacity suspended by the court. Bloomberg