Sesa Sterlite (SSLT) Ltd., which won approval to restart its iron ore mines in Karnataka, will increase production of the raw material from the southern state by 14 percent a year, easing supplies to local steelmakers.
The company, controlled by billionaire Anil Agarwal, received clearance from a committee appointed by the nation’s top court to produce as much as 2.29 million metric tons of the raw material a year, Executive Director Prasun Kumar Mukherjee said today. Output in the three months to March may reach 1.2 million to 1.5 million tons and can be sold through electronic auctions, he said.
The resumption will help ease iron ore shortages faced by local steelmakers including JSW Steel Ltd. (JSTL), India’s third-biggest producer of the alloy. Iron ore miners in the southern state are producing a little more than half of the 30 million tons needed annually after the top court partially lifted the ban imposed on environmental grounds.
“There is enough local demand for iron ore and the prices are good,” Mukherjee said today in a phone interview. “We will sell the ore through online auction and also use some ore for our own needs.”
Shares of Sesa Sterlite, also India’s biggest aluminum, zinc and copper producer, rose as much as 3.7 percent, the most since Dec. 16, to 208.80 rupees and traded at 203.55 rupees as of 10:12 a.m. in Mumbai. The benchmark S&P BSE Sensex fell 0.1 percent.
Iron ore mining accounted for 98 percent of earnings at Sesa Goa Ltd., which in August merged with group company Sterlite Industries (India) Ltd. to form Sesa Sterlite.
The nation’s top court, which also banned mining in the western state of Goa, said in April Sesa needs the consent of federal and state governments to commence operations. Sesa, which got India’s environment ministry approval in August, also met all requirements for a permit to extract the raw material, two officials familiar with the matter had said in October.
To contact the reporter on this story: Abhishek Shanker in Mumbai at email@example.com
To contact the editor responsible for this story: Jason Rogers at firstname.lastname@example.org