Lifting of suspension on Goa mines a positive, but re-examination of coal blocks a major setback: Taher Badshah

In a chat with ET Now, Taher Badshah, Motilal Oswal AMC, shares his views on the latest developments in the metals and mining sector.

ET Now: The environment ministry has revoked suspension on mining leases in Goa. What is your view on Sesa Sterlite? I do not think there should have any major impact. Meanwhile, bigger news flow today is that nine coal blocks will be re-examined by the government. How much uncertainty does it cast on the companies which had won these mines earlier?

Taher Badshah: I would say that the Goa news is fairly positive in the sense that even if it were take three to six months for the Goa mining leases to recommence, it is a good sign. If you were to probably see the liquidation of inventories during the time when the monsoon season is on, the decision has probably given that window of opportunity to clear out that inventory.

The problem right now that we are facing is that ground level activity in many areas, which has really come to stand still. The resolution of this and revoke of suspension on Goa mining leases will clearly be helpful in order to kick start economic activity around that region.

Secondly, as far as MMDRA is concerned, if there were to be any kind of clawback on the bidding process (which has already happened) — which probably was touted to be reasonably transparent — then it would clearly dampen the sentiment. We were looking at looking at better visibility for some of the companies on their newly bid mines.

We would have to go again and restart that process all over again. I hope it does not happen, but if that were to happen, then it will clearly be a setback for some time. Many of the downstream associated activities crushing, mining, downstream metal production, etc, would have kick started and that would have helped the overall industrial production. Hence, it is going to be a setback.