Mining companies to take a hit of Rs 15,000 cr

New Delhi : Mining companies have warned of a price spiral in commodities once the new mining law provisions are in place. The industry sees the government decision of mandatory profit and royalty sharing impacting it by an estimated Rs 15,000 crore every year. This would include a Rs 12,200-crore hit on non-coal mining companies and Rs 2,800 crore on coal miners.

“The provisions of this Bill will affect the industry badly," says Anand Goel, joint managing director, Jindal Steel and Power Ltd. “It will hit the valuations of major companies. The move will definitely result in a price spiral in end-products like power and steel. But what can we do, if the government wants it this way?" JSPL, part of the $15-billion O P Jindal Group, has a power production capacity of 2,000 Mw and a steel-making capacity exceeding three million tonne per annum. The company mines over 11 mt of non-coking coal and around 3 MT iron ore from its captive mines annually.