Metals and Mining - Shah Commission recommends iron ore export ban ::Emkay PDF link

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Metals and Mining Shah Commission recommends iron ore export ban M B Shah Commission submitted its final report on mining in Goa; recommends complete ban on iron ore exports; We believe even a partial ban on exports would be negative for Sesa Goa. Shah Commission’s recommendations As per the news reports, the Justice M B Shah commission, who was investigating illegal mining in Goa and other states has submitted its final report on Goa to the Ministry of Mines yesterday. The news reports suggest that the commission has again recommended a ban on iron ore exports from Goa till the whole system is streamlined and regularized. In its interim report also the commission had recommended to ban exports of ore from the state. The commission is believed to have accused the state for not having proper check on the illegal mining after surveying 122 mines of which 90 are working. Sesa Goa to be impacted hard; no impact on other ferrous players Change in volume by 1 mt would change Sesa Goa’s core EPS by 6%, which is currently at Rs 6.5 for FY13 (Rs 21.3 pre merger). We had revised our target price based on SOTP to Rs 205 for the proposed new entity i.e. Sesa Sterlite. We maintain our hold rating on the stock. We would continue to monitor the development in this matter and would incorporate change in valuation accordingly.

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