Mumbai : Metals and mining giant Vedanta said it may see impairment of up to Rs 1,800 crore in the current fiscal on account of the Supreme Court order to shut mining operations in Goa from March 16, 2018.
“In light of the Supreme Court of Indi jaudgement dated February 7, 2018 wherein the Court has directed that effective March 16, 2018 all mining operations in the state of Goa are to be stopped, the Company wishes to inform its investors that there could be a likely impairment of Rs 1,500 crore to Rs 1,800 crore net of taxes (Rs 2,100 crore to Rs 2,400 crore gross of taxes) on this account,” Vedanta said.
The Anil Agarwal-led company said this is mainly related to mining reserve and would be reflected in the results for FY 2017-18.
Stating that the impairment is non-cash accounting item, the company also clarified that the closure of the group’s iron ore business in Goa would not have any material impact on its profitability.
Vedanta said it reviews the carrying value of its assets at each reporting period end, considering market developments such as long term commodity price assumptions, regulatory changes and other developments.
In its order on February 7, the apex court had quashed 88 mining leases in Goa, leading to closure of the mining industry in the state. The ban would affect not only Vedanta but also several small unlisted companies run by local families.
Vedanta 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.