Vedanta group firm Sesa Sterlite (formerly Sesa Goa) today resumed iron ore mining in Karnataka after a gap of more than two years after securing the final nod from a Supreme Court appointed monitoring panel to restart operations.
The resumption of operations comes eight months after the Supreme Court lifted the mining ban in Karnataka in April.
Sesa Sterlite's Chitradurga mine was among the beneficiaries of the apex court order, which had allowed resumption of mining in Category-'A' and 'B' mines in the state with conditions.
So far, Sesa Sterlite's all iron ore mining operations in India were closed primarily due to Supreme Court-imposed mining bans in Goa and Karnataka. Even today, company's Goa operations are closed due to the ban continuing in the state.
"Sesa Goa Ltd (now Sesa Sterlite Ltd) received permission from the Supreme Court appointed Monitoring Committee to resume the mining activities at its Karnataka mine. Accordingly, the company has commenced its mining operations today, in accordance with stipulated conditions," Sesa Sterlite said in a statement.
However, the company will be operating at a much reduced capacity of 2.29 million tonnes per annum (MTPA) as state's total iron ore production has been capped at 30 MTPA by the apex court. Sesa Sterlite was the largest ore producing mine in the state with a 6 MTPA capacity before the ban was imposed by the apex court during July-August, 2011.
Senior officials of Sesa Sterlite said that the company has been preparing for the day for quite some time now and would try to achieve half of the new production capacity (2.29 MTPA) by March when the fiscal ends, to make up for lost time.
They also said the company has secured all requisite clearances for doing mining in Karnataka.
Cascading effects of closure of mining operations were evident on Sesa Goa. While the company posted a consolidated profit of Rs 2,280 crore in 2012-13, had it not been for the Rs 2,411 crore contribution made by associate firm Cairn India, it would have reported a net loss of Rs 131.03 crore.
The company renamed itself as Sesa Sterlite in August following completion of much delayed merger of Sterlite Industries and some other Vedanta group firms into itself.
For the six months ended September 30, the company's sales from iron ore mining business has been zero due to non-resumption of operations in Karnataka and mining ban in Goa.
Following the announcement, shares of the company rose by 0.77 per cent to close at Rs 202.75 a piece on the BSE today.
