Vedanta hit by up to $600 million charge for closure of Goa iron ore unit
The close of Vendanta Resources iron ore business comes following Supreme Court quashing all iron ore mining permits in Goa.business Updated: Mar 29, 2018 23:35 IST
London-listed Vedanta Resources said on Thursday it would likely record an impairment charge of up to $600 million following the closure of its iron ore business in Goa.
In February, the Supreme Court quashed all iron ore mining permits and mining was ordered stopped from March 16 in Goa, one of the country’s top producing states for the material used in steel.
Billionaire Anil Agarwal’s Vedanta Resources, the state’s biggest ore miner, said there could be a likely impairment of $500-600 million net of taxes, or $700-$800 million gross of taxes, on this account.
Court action against illegal mining shut the Goa industry for more than two years from 2012, prior to which Goa had exported about 50 million tonnes a year. The Supreme Court later limited production in the state to 20 million tonnes a year.
The latest ban would affect not only Vedanta but also several small unlisted companies run by local families.
Vedanta Ltd is expected to produce around 5.5 million tonnes of Goa ore in the fiscal year ending March 31. India’s ore production was 192 million tonnes last fiscal year.
The parent company said its Goa ore business would not have “any material impact” on the profitability of the group.