Vedanta Resources is considering options including lay-offs for some of the 2,000 employees of its iron ore business in southwest India that was shut down by a court, two sources said, as it struggles with a series of setbacks in the country.
The Supreme Court in February cancelled all iron ore extraction permits in the southwestern state of Goa and ordered mining to cease from March 16 on environmental and other concerns. The state is known for its low-quality iron ore exported to countries such as China. Mining major Vedanta has come under increased scrutiny since police opened fire on protesters, killing 13, at a demonstration against its copper smelter in southern India last month. The smelter has since been shut down.
Vedanta said in late March it was likely to record an impairment charge of up to $ 600 million following the closure of the iron ore business. It added, however, that the Goa ore business would not have any material impact on the overall profitability of the group. The company, the biggest miner in Goa with an annual production of around 5.5 million tonnes before the shutdown, said it spends 120 million rupees ($ 1.77 million) a month on salaries of its employees in the state.