India Top Court Cancels Mine Permits; Monnet Ispat Falls
India’s top court today scrapped the iron ore mining permits of JSW Ispat Steel Ltd., Monnet Ispat & Energy Ltd. (MISP) and four other steelmakers, reserving the mines in Jharkhand state for government-run companies.
Monnet Ispat dropped 15 percent, the most in almost four years, to 327.05 rupees at the close in Mumbai. The benchmark Sensitive Index fell 1.2 percent.
A two-judge panel of the Supreme Court today upheld a 2009 lower court order canceling the permits and supporting a federal government move to set aside the reserves for companies including Steel Authority of India Ltd., the nation’s second- biggest producer of the alloy. The federal administration in 1969 had reserved 2,590 hectares (6,400 acres) in the Ghatkuri hills in the mineral-rich eastern state.
“It appears to be an order that could affect the sentiments of the private metal companies,” said Jatin Y. Damania, an analyst at SBI Capital Markets Ltd. Damania said he is awaiting details of the court ruling to assess the impact.
In 2006, the state government of Jharkhand awarded the mines to a group of six companies, including Prakash Ispat Ltd., Ispat Industries Ltd. and Abhijeet Infrastructure Ltd. Ispat Industries is now called JSW Ispat Steel (JSWI) after being acquired by JSW Steel Ltd. (JSTL) The companies had challenged the Jharkhand high court order to cancel the leases.
Adhunik Alloys and Power Ltd. was among the companies given the mining permit, Manoj Agarwal, managing director of group company Adhunik Metaliks Ltd. (ADML), said today by phone. Adhunik Metaliks does not have any holding in Adhunik Alloys, he said.
“We’re waiting to see the order and will abide by the ruling,” Agarwal said.
Adhunik Metaliks declined 2.2 percent to 30.75 rupees, the lowest level since April 1, 2009.
The court ruling will not hamper the current business, Monnet Ispat said in a stock exchange filing today. The company didn’t sign any mining lease with the state government, it said. R. Jayaraman, spokesman at JSW Group, couldn’t immediately comment on the order.
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