The Supreme Court on Tuesday deferred the hearing in the Sarda iron mines case. Shares of Delhi-based Jindal Steel & Power (JSPL) tumbled 12 per cent intraday Tuesday on reports after it emerged that the Supreme Court had refused to pass an interim order in the case.
“The honourable court has not given any decision on the Sarda case today. It has only deferred the hearing to January 17. Deferral does not mean refusal at all,” VR Sharma, managing director, JSPL told Business Standard today.
“The ore which is lying in the premises of Sarda mines must be used by the user (JSPL) since the company has already paid the duties as well as royalty to the government (the committee has mentioned). We are awaiting final verdict now which will hopefully come next month,” said Sharma.
The Odisha government and JSPL have been in dispute over royalty payment for the iron ore for more than 5 years now. The 12 million tonne iron ore fines lying in the mine premises are worth close to Rs 2,000 crore (US$0.28 billion) and are of Fe (ferrous) grade 65%.
The mines are currently not operational. A favorable verdict would help the company get assured an iron ore (lying in the premises) supply for its pellet plant for which it is currently sourcing the material from the open market. “A verdict against the company would not have any impact on the company’s operations,” said analysts with Edelweiss Securities.
The 12 million tonne iron ore had been mined over a period of 18-21 months before Sarda mines received stoppage of mining orders over environmental clearance issues, said the management.
Lenders are also in favour of JSPL getting access to the material as it would enable it to repay the debt, since the company has already paid the royalty, said the flash note.
JSPL was sourcing iron ore from the Sarda mines for its pellet plant, which lies at the bottom of the hill at Thakurani deposit in Odisha where Sarda operated a 5 million-tonne mine.
The company had moved court to be allowed to lift the iron ore, which it had already paid for, while the Odisha Mining Department had been of the view that transporting that ore out would also count as mining, and could not be allowed while the mining operations had been suspended.
“We have a positive operating outlook for JSPL in anticipation of sustained volume uptick and potential cost benefit from captive coal from the Gare Palma IV/1 block. We have not considered any benefit from Sarda iron ore fines inventory in our estimates,” Edelweiss Securities said. It has maintained ‘buy’ on the primary steel producer.
In Odisha, JSPL has a 6 million-tonne steel plant in Angul, a 9 million-tonne pellet plant in Barbil and an iron ore mine in Tensa, which partially fulfills the requirement of iron ore for producing sponge iron.
Source: Business Standard |
