India's Supreme Court nixes all Goa's iron mining leasesPublished by MAC on 2018-02-08
Source: Bloomberg, Indian Express
Vedanta most affected
Local - and wider - battles- to curb Goa's iron ore mining spree have lasted many years. Despite the central government ordering closure of these operations in 2012, the state government allowed them to resume three years later, in defiance of the country's Supreme Court (See: The reality of mining behind Goa's playtime facade ).
Now, the Court - clearly angered at this move - has ordered that all these illegal leases be cancelled.
London-listed Vedanta Resources will be most impacted by the ruling. Vedanta stands to lose about $165 million, or about Rs 1000 crore, in revenue from the Supreme Court's decision, while its net profit fell 8.62% to Rs 2959 crore on 22.05% growth in total income to Rs 24,934 crore in Q3 December 2017 over Q3 December 2016.
The leases will only be renewed after environmental clearances have been issued, and will have to be put up for auction.
Supreme Court Cancels All Iron Ore Mining Leases In Goa
7 February 2018
The Supreme Court today quashed all the 88 iron ore mining leases renewed by the Goa government, an order that impacts billionaire Anil Agarwal's Vedanta Group the most.
A bench headed by Justice Madan Lokur ordered that no mining activity in the state will continue after March 15. The top court ordered that the Goa government will have to grant the leases afresh through auctions.
The Supreme Court judgement comes on a plea filed by non-government organisation Goa Foundation represented by lawyer Prashant Bhushan. The petitioners had alleged that mining undertaken through these leases was illegal.
Goa was once the country's largest exporter of low-grade iron ore. The Supreme Court order will impact 20 million tonnes a year capacity, more than a quarter of which is operated by the Vedanta Group. The company was allocated additional 3 MTPA in the coastal state. A company spokesperson declined to comment, saying it would react after getting a copy of the Supreme Court verdict.
In October 2012, the apex court suspended all iron ore mining and transportation in the state, following a report submitted by the Justice MB Shah Commission, which found that millions of tonnes of iron ore was mined illegally. In 2015, the state government renewed 88 mining leases owned by the same holders accused of illegal mining.
In 2010, the Supreme Court had held that all the mining leases in Goa had completed 50 years in 2007 and therefore they had become invalid and now only fresh mining leases can be given and fresh environmental clearances would be required, Bhushan told BloombergQuint. Instead of doing that, just one week before the new mining act came into force, which was in January 2015, the Goa government renewed leases of 88 mines which the Supreme Court had already declared illegal. Yet they renewed it to avoid this auction.
Supreme Court quashes all Goa iron ore mining leases, says can’t operate after March 15
7 February 2018
The Supreme Court on Wednesday cancelled all iron ore mining leases in the state and said operations have to stop on March 15. The top court said fresh leases will be issued only after obtaining an environment clearance. The court was hearing a plea filed by NGO Goa Foundation. It further asked the central government to start a fresh process of auction for mining companies in Goa.
In January this year, the Goa Police filed a chargesheet against former chief minister and Congress leader Digambar Kamat for condonation of delay in renewing a mining lease that caused a loss to the state exchequer. The SIT had filed a case in September 2014 against Kamat, owner of the mine at Collem in south Goa...The FIR was registered on a complaint by the state’s Mines and Geology Department.
In October 2012, the apex court suspended all iron ore mining and transportation in the state, following a report submitted by the Justice MB Shah Commission, which found that millions of tonnes of iron ore were mined illegally. In 2015, the state government renewed 88 mining leases, owned by the same holders accused of illegal mining.
Vedanta hit by iron ore mining halt in Goa
9 February 2018
Shares in Vedanta, the London-listed natural resources company controlled by one of India’s richest men, fell as much as 5.5% on Thursday on the news that the Indian Supreme Court had cancelled all the 88 existing iron ore mining licences in Goa.
According to the ruling, the process of renewing the cancelled permits in 2015 was against the law. As a consequence, the country’s top court said that no mining activity would be allowed in the western state, one of India’s top iron ore producers, after March 15.
Mining companies, said Vedanta, can then apply for new licences, but the 20 affected companies will have to wait before re-starting operations.
The court also said a special investigation team should be set [up] , which mission will be recovering any payments the companies have made since 2015.
Vedanta’s stock dropped as much as 5.5% on the news, and it was 4.26% lower at 727.60p near the end of the day.
The company, India’s largest miner and No. 1 iron ore exporter, said it is assessing the financial and operational impact of the ruling, which will impact 20 million tonnes a year, more than a quarter of which is operated by Vedanta.
A similar ruling in 2012 banned iron ore mining in the coastal state for more than two years. Before that, Goa generated about 50 million tonnes of iron ore a year, most of which was exported to China.
Vedanta gains in volatile trade on bargain hunting
9 February 2018
Supreme Court cancels iron ore mining permits in Goa - petitioners Key indices languish in negative terrain SC cancels 2nd renewal of 88 iron ore
Vedanta rose 0.57% to Rs 315.35 at 13:22 IST on BSE (Bomay Stock Exchange) in volatile trade on bargain hunting, even as the Supreme Court announced cancellation of all mining leases in Goa...
The stock had underperformed the market over the past 30 days till 8 February 2018, falling 6.35% compared with 0.06% fall in the Sensex. The scrip also underperformed the market in past one quarter, declining 3.08% as against Sensex's 3.3% rise. The scrip, however, outperformed the market in past one year, surging 25.77% as against Sensex's 21.47% rise.
The large-cap company has equity capital of Rs 371.72 crore.
Face value per share is Re 1.
Shares of Vedanta had declined 8.07% in the preceding five trading sessions to settle at Rs 313.55 yesterday, 8 February 2018, from its close of Rs 341.10 on 1 February 2018.
Vedanta after market hours yesterday, 8 February 2018 said that Supreme Court of India vide judgement dated 7 February 2018 has directed to stop all mining operations in the state of Goa with effect from 16 March 2018.
The Supreme Court has directed that the mining lease holders who have been granted the second renewal are given time to manage their affairs and may continue their mining operations till 15 March 2018. However, they are directed to stop all mining operations with effect from 16 March 2018 until fresh mining leases and fresh environmental clearances are granted.
Vedanta said that the company's mines in Goa will be impacted consequent to the judgement of Supreme Court. The company is assessing the financial and operational impact of the said judgement.
As per reports, India will lose nearly Rs 4000 crore ($600 million) of export value with this ban given that the low-quality iron ore is shipped at about $30 a tonne. The total banned capacity in Goa stands at 20 million tonnes per annum (MTPA), of which Vedanta operates 5.5 MTPA. Vedanta stands to lose about $165 million, or about Rs 1000 crore, in revenue from the Supreme Court's cancellation of all mining leases in Goa, reports indicated.
The Supreme Court's ruling came on a plea filed by NGO Goa Foundation that stated the leases were illegal, as per reports. The case dates back to 2012 when the Supreme Court quashed all mining leases in Goa since their 50-year term lapsed in 2007. In August 2015, licences were renewed and given extension till 2020 under the deemed provision.
Vedanta's consolidated net profit fell 8.62% to Rs 2959 crore on 22.05% growth in total income to Rs 24,934 crore in Q3 December 2017 over Q3 December 2016.
Vedanta is a diversified natural resources company, whose business primarily involves producing oil & gas, zinc - lead - silver, copper, iron ore, aluminium and commercial power.