ACC declines on suspension of limestone mining operations

ACC declined 1.85% to Rs 1,378 at 10:30 IST on BSE after the company said the Jharkhand and Odisha state governments have served notices on the company to suspend limestone mining operations at Chaibasa and Bargarh cement plants.

The company made the announcement after market hours on Friday, 10 October 2014,

Meanwhile, the BSE Sensex was down 161.84 points, or 0.62%, to 26,135.64.

On BSE, so far 2,156 shares were traded in the counter, compared with an average volume of 22,638 shares in the past one quarter.

The stock hit a high of Rs 1,394.70 and a low of Rs 1,375.45 so far during the day. The stock hit a record high of Rs 1,570 on 10 September 2014. The stock hit a 52-week low of Rs 971.25 on 30 January 2014.

The stock had underperformed the market over the past one month till 10 October 2014, falling 8.2% compared with Sensex's 2.81% decline. The scrip had also underperformed the market in past one quarter, declining 3.69% as against Sensex's 3.64% rise.

The large-cap company has an equity capital of Rs 187.75 crore. Face value per share is Rs 10.

ACC said that the notices were served after a Supreme Court ruling on renewal of mining leases. The clinker production at Chaibasa and Bargarh plants has stopped. However, the operations of cement grinding units associated with these plants are continuing with transfer of clinker to them from sister works, ACC said. The company said it is awaiting further developments in the matter. Whilst the company has complied with the court order seeking stopping mining activities, the company is in the process of seeking relief in the matter and is hopeful of a positive outcome, ACC said.

Pursuant to the Supreme Court's judgement in the matter of Goa Foundation vs Union of India & Ors. and in Common Cause Vs. Union of India on deemed renewal and subsequent amendment ot the Mineral Concession Rules 1960, the mining activity of all lease holders whose mines are on deemed renewal have been affected. Pursuant to the aforesaid amendment, closure notices are being issued by states across industries for stopping mining activities with effect from the date of notice wherever mining has been carried out on deemed renewal basis.

ACC's consolidated net profit fell 7.1% to Rs 243.15 crore on 7.5% rise in total income to Rs 3097.43 crore in Q2 June 2014 over Q2 June 2013.

ACC is a manufacturer of cement and ready mixed concrete with a countrywide network of factories and sales offices.

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