Metal stocks zoom up
The Govt yesterday introduced the Amended the Mines & Minerals (Development & Regulation) Act (MMDR). This MMDR has done away with end use restrictions to participate in coal mine auctions. It has ensured smooth transition of the iron ore mining leases that are expiring this year without delay.
Under this proposed amendment the MMDR Act, the Environment and Forest clearances will be automatically transferred to the new bidders. This means instead of a wait of almost two years, there will be immediate seamless transfers for mining within the existing areas.
The metal stocks, barring NMDC have reacted positively to this news. The BSE Metal Index is up in the green, with JSW Steel leading the pack with an almost 4% rise at Rs.272.20, followed by Tata Steel, Hindalco, Jindal Steel, SAIL, VEDL, Nalco and Hind Zinc.
This comes as a huge relief to these manufacturers as it means there will now be no disruption in supply. India was projected to face a shortfall of almost 60 million tonnes of iron ore when it begins the auction of 36 working iron ore mines before 31st March 2020. And now because there is a process of seamless transfer, there will no shortage and thereby no major price spike ups in iron ore prices – the main raw material in metal making.