The mining ban imposed by the state government of Goa is unlikely to have a major impact on the likes of iron miner Sesa Goa as the current quarter is a lean season for mining in the state, analysts said on Tuesday.
?Seasonally, Q2 is the weakest quarter for Sesa Goa, where it sells only 10-12% of its annual output, given the monsoon in Goa,? said Bhavesh Chauhan, metals analyst at Mumbai-based brokerage Angel Broking. Meanwhile, Sesa Goa said on Tuesday that it has begun efforts to ensure early restart of the company?s operations in the state.
?Sesa will submit all relevant documents to the government authorities for scrutiny at the earliest in order to ensure early restart of Sesa?s operations,? the company said in a statement.
Sesa Goa will be able to export the iron ore in its stockpile as the order from the state government allows for transportation of iron ore from stockpiles to ports. Analysts also said that the ban is unlikely to impact domestic steel companies as most of the iron ore from Goa is exported.
?Goa produces and exports roughly 50 million tonnes of iron ore per year,? said an analyst with a foreign brokerage on condition of anonymity. ?The only impact will be on exports and since production is very low during this quarter, there won?t be a measurable impact if the ban lasts for two to three weeks, which is our expectation.?
?However, in India, such things take time to resolve and if the ban is an extended one like the mining ban in Karnataka, then there would be big impact on Sesa Goa?s production,? the analyst added.
Last week, the Supreme Court partially lifted a year-long ban on mining in Karnataka by allowing some clean mines to restart.
The mining ban in the state came a few days after an enquiry by Justice MB Shah exposed an illegal mining scam at around 90 of Goa?s operational mines. The commission indicted state government departments including the mines, geology, forest and pollution control board.
?It is necessary in order to scrutinise clearances obtained by the mining lease holders and allowing continuation of mining without proper scrutiny and verification of requisite approval,? principal secretary (mining) RK Verma said in his order released late on Monday.
India has been the world?s third largest exporter of iron ore exporting 100 million tonnes a year. Goa accounted for more than 50% of the total exports. The primary market for Indian iron ore exports is China.
Mining industry body Federation Indian Mineral Industries (FIMI) said it?s too early to estimate the fall in exports.
?If the ban continues for long time, it could impact exports,? said RK Sharma, secretary general of FIMI.