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Sesa can mine in Karnataka but can't sell for now

Tuesday, 31 December 2013 - 12:00pm IST | Place: Mumbai | Agency: DNA

Although Sesa Sterlite (formerly Sesa Goa) received the Supreme Court’s (SC) clearance on Friday to resume iron ore mining in Karnataka, it will not be able to sell the mined ore till its new corporate identity receives recognition from the Karnataka government, the firm’s executive director Prasun Kumar Mukherjee said.

That recognition could materialise within a few weeks, a Karnataka government official said.

Mukherjee said without such recognition, mining without selling would result in inventory build-up.

“We hope to mine around 1-1.5 million tonne of ore in the next three months.”

Sesa Sterlite owns the 6 million tonne (mt) Narrain mine at Chitradurg in Karnataka. Mining resumed soon after the apex court’s clearance on Friday. But, it can produce only 2.9 mt annually from the mine, as per a court directive. Mining in Karnataka was banned in 2012 for almost two years by the Supreme Court to curb illegal mining. Analysts cheered the SC clearance, but said Sesa’s earnings estimates may not improve much. They expected Sesa to resume mining in October so as to produce 2.9 mt of ore this fiscal, which may now be 2% lower. Supplies to ore-starved steelmakers in Karnataka may now resume.

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