Sesa Goa expects mining ban to be lifted by December

While imposing a complete ban on mining in Karnataka, in August, the apex court had directed to conduct a macro level environment impact assessment of the areas by Indian Council of Forestry Research and Education, together with other expert agencies in the field of forestry

New Delhi: Sesa Goa expects the mining ban in Karnataka to be lifted by December, enabling the Vedanta group firm to resume normal production in the state from early 2012, reports PTI.

In an investor conference call, the top company management said the case on illegal mining, pending before the Supreme Court, is likely to be resolved in the next two months.

“Inspection of our mine (by apex court nominated agency) is over... Hopefully, by this quarter, it (the case) will come to a conclusion and by next quarter, we can have normal production and sales from the state,” Sesa Goa managing director PK Mukherjee said.

“We are one of the cleanest. That is what we get to feel from the way they (the inspecting agency team) were talking,” he added while talking about the company’s second quarter results on Tuesday.

While imposing a complete ban on mining in Karnataka, in August, the apex court had directed to conduct a macro level environment impact assessment (EIA) of the areas by Indian Council of Forestry Research and Education (ICFRE), together with other expert agencies in the field of forestry.

The court had directed to submit the EIA report within three months.

Following the ban, Sesa Goa had stopped production from its only mine in Karnataka’s Chitradurga district. The mine has an annual production capacity of 6 million tonnes.

Mr Mukherjee said annual production of the company will remain at the last year’s level or marginally higher, if production from Karnataka resumes in the January-March quarter.

He added that the company can produce up to 2 million tonnes of iron ore from the state in the fourth quarter, if the mining ban is lifted.

The private sector mining major, which produced 18.8 million tonnes of iron ore in the last fiscal, had earlier said that ban on mining in Chitradurga will affect its gross revenues by up to 15%.

Before the mining ban, the company had an inventory of 8,00,000 tonnes of iron ore in its mine from Karnataka. Of this, 2,92,000 tonnes were sold through e-auction, which is being monitored by an apex court appointed panel.

The company is expecting to sell rest of the stock in the coming months via the e-auction route, Mr Mukherjee said.

For the quarter ended 30 September 2011, Sesa Goa’s consolidated net profit plunged over 99% to Rs1.28 crore due to foreign exchange losses and lower realisation from iron ore.

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Finance ministry nod likely for capital infusion in PSU banks by mid-Nov

The government has already earmarked Rs6,000 crore towards capital infusion in the state-owned banks during 2011-12 and the additional amount would be sought through second batch of supplementary demands for grants to be tabled in the Winter session of Parliament

New Delhi: The finance ministry on Thursday said it is likely to approve capital infusion into PSU banks, including State Bank of India (SBI), by mid-November, reports PTI.

The capital requirement of PSU banks in the current fiscal has been estimated between Rs10,000 and Rs20,000 crore.

“We will hopefully decide on the capital infusion for banks by Tuesday,” financial services secretary DK Mittal told reporters after the second meeting of the Committee on Capital Requirements of Financial Institutions.

Once this committee takes a decision, the proposal will go to finance minister Pranab Mukherjee for his approval, Mr Mittal said, adding the process is likely to be completed by 15th November.

The first meeting of the panel headed by finance secretary RS Gujral was held last week.

Capital infusion proposal after the approval from the finance minister will go to the Cabinet, he said.

About five to six banks, including SBI, Bank of Baroda, Syndicate Bank and Union Bank of India would require capital during the current fiscal, he said.

The capital is either required to raise government holding to 58% or Tier I capital to 8%.

For current fiscal, he said, “The requirement...in different scenarios for all public sector banks is between Rs10,000 crore to Rs20,000 crore."

The committee is examining proposals for capital requirement during the current fiscal as well as for long-term (2021). By that time banks will have to meet Basel III norms as well.

With India set to implement Basel III norms on capital adequacy, Mr Mittal said the PSU banks would be requiring about Rs3.5 lakh crore in the next 10 years.

The government has already earmarked Rs6,000 crore towards capital infusion in the state-owned banks during 2011-12 and the additional amount would be sought through second batch of supplementary demands for grants to be tabled in the Winter session of Parliament.

The government during 2010-11 had provided capital support to the tune of Rs20,157 crore to public sector banks.

The lenders which got funds from the government last fiscal include Punjab National Bank, Bank of Baroda, Union Bank of India, Oriental Bank of Commerce and UCO Bank.

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Economy faces worrying signs from Europe, US: Assocham

Though results for the second quarter suggest ‘healthy’ state of affairs for Indian corporates, fears of global financial contagion pulling down growth in developing countries are mounting,” industry chamber Assocham said

New Delhi: Domestic demand is helping the Indian economy, but signs from Europe’s debt crisis and a faltering US recovery are worrying, reports PTI quoting industry chamber Assocham.

Though results for the second quarter suggest ‘healthy’ state of affairs for Indian corporates, fears of global financial contagion pulling down growth in developing countries are mounting,” it said.

An analysis of the second quarter results of 87 companies across different sectors showed that even the domestic consumption is coming under the impact of high interest rates and increasing raw material costs.

The Reserve Bank of India (RBI) has followed a tight monetary policy since March 2010, raising interest rates by 375 basis points since then.

Besides, fresh investments face delays in government clearances, the Assocham said.

“There are some long-term concerns,” which need to be addressed by the government, Assocham secretary general DS Rawat said.

He said the chamber found that while there were no visible signs yet, fall in business for the IT and ITeS to Europe and the United States,” prices have fallen or remain unchanged".

Macro-economic concerns in Europe are weighing on the Indian corporates, the Assocham said.

It said the fast moving consumer goods (FMCG) firms are unable to pass on higher input costs to customers due to competitive market conditions while automobiles, real estate and other industries could hold on to profits with declining margins.

It said the power companies have declared subdued results. While generation costs have gone up, tariffs are difficult to revise.

Depreciating rupee value has posed another challenge for the Indian industry. The landing cost of the imported raw materials have gone up as a result of weakening rupee, it said. The rupee has weakened by about 12% in the last two months.

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