Tata Steel and SAIL Gets Mining Permits for Their Suspended Iron Ore Mines in Odisha

NEW DELHI (Scrap Monster): India’s top steel producers, Tata Steel Ltd and Steel Authority of India (SAIL) restarted most of their iron ore mine after getting the permits from the State Government; as a result shares got surged.

Mines Secretary at Odisha, G. Srinivas said during Monday that eight mines of annual capacity of about 20 million tonnes, has got the new mining leases and restarted its ore extraction. He added that four of them belong to Tata Steel and three belongs to SAIL and remaining one is of Orissa Lining Corp Ltd.

These mines are charged with mining suspension by the Supreme Court of India on May 16 due to the pending renewal of their mining leases. In accordance with the order, the Apex court has given a period of six months to the state government to dispose every application on permit renewal and also asked to process the application for the mines belonged to steel producers.

A Mumbai-based analyst with CIMB Securities India Pvt., Rahul Jain  commented that the mine restart was positive news and had come much before their expectations. Jain has a hold rating on SAIL and an add rating on Tata shares. He added that their costs would not rise because they need not but from outside.

Mumbai based Tata Steel shares surged 3.8 percent to Rs 492.90, the highest point since May 14 and New Delhi based SAIL shares increase 4.7 percent to Rs 91.95. The benchmark S&P BSE Sensitive Index also surged 1.9 percent. Srinivas said that they had ensured that the largest mines had started and that would improve the supplies. The reopening mines constitutes two third of the total capacity suspended by the apex court.