Vedanta Resources surges on resumption of Goa iron ore operations

Vedanta Resources surged after the miner said it was likely to resume operations at its iron ore operations in Goa on Monday after receiving the necessary approvals.

The company said it has received the relevant consent, license and approvals to start mining again, and has been granted approval for total extraction of 5.5m metric tonnes.

Vedanta said that to date, five mining plans and schemes for its mines have been cleared by the Indian Bureau of Mines and it is awaiting clearance of a further 15 plans. Over the balance monsoon period, it expects to receive these approvals, with a full-scale resumption post monsoon.

In addition, the company said iron ore markets and prices are weak and the international trade environment remains challenging.

“We continue to work with central and state government to improve competitiveness of Indian exports,” it said.

RBC Capital Markets said: “We view the resumption of iron ore operations in Goa and the gradual ramp-up towards the 5.5 million tons per annum production as a small positive for Vedanta. However, the weak iron ore pricing environment, a 10% export duty, as well as the 5.5mtpa production cap, suggest that profitability of Vedanta’s iron ore operations will likely remain subdued in the near term.”

At 1501 BST, Vedanta shares were up 8.6% at 485.20p.