June 11 (Bloomberg) -- Sterlite Industries (India) Ltd., owned by billionaire Anil Agarwal, rose to the highest level in six weeks in Mumbai after saying it bought a stake in a bauxite mining venture.
Sterlite, a unit of London-listed Vedanta Resources Plc, said in an exchange filing it acquired a 24.5 percent stake in Raykal Aluminium Co., a unit of Larsen & Toubro Ltd., for 2 billion rupees ($36 million). It will buy the entire company in phases for 18.1 billion rupees, it said.
Larsen, which holds a license to prospect for bauxite in the eastern state of Odisha, is expected to seek a mining license, said Abhisar Jain, an analyst at Centrum Broking Ltd. in Mumbai. Vedanta’s bid to mine for the raw material used to make aluminum has been thwarted by the government for environmental breaches.
“Vedanta will benefit if Raykal secures a mining license as it doesn’t have a raw material source of its own,” Jain said. “The actual mining itself may take time but this is a good beginning.”
Sterlite shares rose as much as 4.9 percent to 105.55 rupees, the highest since May 3, and traded at 104.50 rupees as of 2 p.m. in Mumbai The key Sensitive Index gained 0.7 percent.
Sterlite was in August 2010 denied a permit to mine bauxite from the Niyamgiri hills in Odisha after a government panel found that the mining may jeopardize the livelihood of the native tribes. Unit Vedanta Aluminium, owned 29.5 percent by Sterlite, operates a 1 million metric ton alumina refinery in Odisha.
Bauxite mining plans of Vedanta Aluminium was rejected by the federal government in August 2010.
To contact the reporter on this story: Abhishek Shanker in Mumbai at email@example.com
To contact the editor responsible for this story: Rebecca Keenan at firstname.lastname@example.org