March 29, 2018 / 4:04 PM / 4 months ago

Vedanta hit by up to $600 million charge for Goa iron ore unit closure

(Reuters) - London-listed Vedanta Resources said on Thursday it would likely record an impairment charge of up to $600 million following the closure of its iron ore business in Goa.

A bird flies past the logo of Vedanta installed on the facade of its headquarters in Mumbai, India January 31, 2018. REUTERS/Danish Siddiqui/Files

In February, the Supreme Court quashed all iron ore mining permits and mining was ordered stopped from March 16 in Goa, one of the country’s top producing states for the material used in steel.

Billionaire Anil Agarwal’s Vedanta Resources, the state’s biggest ore miner, said there could be a likely impairment of $500-600 million net of taxes, or $700-$800 million gross of taxes, on this account.

Court action against illegal mining shut the Goa industry for more than two years from 2012, prior to which Goa had exported about 50 million tonnes a year. The Supreme Court later limited production in the state to 20 million tonnes a year.

The latest ban would affect not only Vedanta but also several small unlisted companies run by local families.

Vedanta Ltd is expected to produce around 5.5 million tonnes of Goa ore in the fiscal year ending March 31. India’s ore production was 192 million tonnes last fiscal year.

The parent company said its Goa ore business would not have “any material impact” on the profitability of the group.

Shares of Vedanta Resources were up 1.7 percent at 1524 GMT.

A man walks past the logo of Vedanta outside its headquarters in Mumbai, India January 31, 2018. REUTERS/Danish Siddiqui/Files

Reporting by Justin George Varghese in Bengaluru; Editing by Matthew Mpoke Bigg

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