Vedanta Group firm Sesa Goa on Saturday said it will stop mining in Karnataka’s Chitradurga with immediate effect, following the Supreme Court’s order banning mining in Chitradurga and Tumkur districts.

“It will adversely affect to some extent the performance of the company,” it said in a filing to the Bombay Stock Exchange, while informing about suspension of its mining activities in Chitradurga. It added that “the annual permitted capacity of the said mine (in Chitradurga) at present is 6 million tonnes“.

The apex court yesterday had extended the ban on mining to Tumkur and Chitradurga districts, while acting on a recommendation by its expert panel for halting extraction of iron ores in the two districts of the state. Mining in Bellary region had already been banned by the court on July 29.

The Central Empowered Committee in its recommendations to the bench on August 19 said that the mining operation was going on recklessly and in an environmentally unsustainable manner with the prime objective to exploit the iron ore mines merely for short-term gains.

Sesa Goa, which has produced 18.8 million tonnes of iron ore in the last fiscal, had said earlier that ban on mining in Chitradurga will affect its gross revenues by up to 15 per cent.

The company, while announcing its first quarter results, had also lowered its sales guidance for the year to 15-16 per cent from the earlier projection of 25 per cent, amid uncertainty over resumption of iron ore exports from Karnataka. Industry sources said suspension of mining in Chitradurga will also affect company’s expansion plans in Karnataka.

(This article was published on August 27, 2011)
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