Shares of state-owned miner NMDC Ltd. fell by up to 7% on December 18, 2024, reaching an intraday low of ₹211.55 on the NSE. This decline follows reports that the Karnataka government is considering increasing the duty on iron ore mining, aiming to generate approximately ₹10,000 crore in revenue from these duties this year.
Karnataka holds a significant position in India’s iron ore sector, accounting for 78% of the country’s total reserves and being the leading producer.
The proposed duty hike has raised concerns about increased operational costs for mining companies operating in the region.
The market reacted negatively to this development, with NMDC’s stock extending its decline for the sixth consecutive session, totalling a drop of over 13% since December 11.
Other metal stocks, including Tata Steel and JSW Steel, also experienced declines of up to 2% around 1:30 PM on December 18.
In addition to the proposed duty hike, the Supreme Court of India has authorized state governments to collect past tax dues from mining companies dating back to April 1, 2005. This ruling is expected to have a significant financial impact on the mining sector, estimated at around ₹1 trillion.
Despite these challenges, NMDC has outlined plans to increase its production capacity to approximately 100 million tonnes by FY30, aiming to capitalize on the projected growth in India’s crude steel capacity.
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