Vedanta hit by USD 600 mn impairment due to India quashing mining permits
In February, India's 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.
London-listed Vedanta Resources said on Thursday it would likely record an impairment charge of up to $600 million (427 million pounds) following the closure of its iron ore business in India's southwestern Goa state.
In February, India's 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.
Shares of Vedanta Resources were up 1.7 percent at 1524 GMT.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)