Passage of Karnataka Minerals Tax Bill to Severely Impact Three Key Metal Corporations

According to Nuvama Research, Vedanta will be severely impacted by future volumes from Karnataka mines. The company will need to pay a 3x royalty rate of 15% as well as a Rs 100 per tonne tax on iron ore. In contrast, NMDC will only need to pay a Rs 100 per tonne tax and an additional 22.5% tax on the Indian Bureau of Mines (IBM) price of iron ore. Nuvama suggests that Vedanta may struggle to pass on the entire increase in costs to customers. JSW Steel, which operates captive mines, will only need to pay a low Rs 100 per tonne tax. However, the company may still be indirectly affected by higher prices from NMDC and other miners. Overall, the new taxes and royalty rates are likely to have a significant impact on Vedanta’s profits and operations.