The new mining law is however seen positively by analysts. President Pranab Mukherjee on Tuesday gave his assent to the mining ordinance that provides for auctioning of mines containing iron ore and others minerals. The ordinance provides for granting mines for 50 years through a competitive bidding route, including e-auction.
The ordinance empowers the Centre to prescribe terms and conditions and procedure for bidding which include production sharing or royalty payment or a combination of both. The Mines Ministry said it would ensure greater transparency and also an increased share for states from the sector.
The mines, which are already granted before the ordinance, would also be deemed to have been given for a period of 50 years. In auction, existing captive user would also have the right of first refusal.
Among the mining stocks, SV Prasad, chairman of Chime Consulting, backs Tata Steel. Technical analyst Rajat Bose said that Tata Steel could bounce back to 400 levels if it holds the 380 levels.
In global markets, copper futures plunged 6.3 per cent to $5,489 a tonne on Tuesday. The industrial metal is often considered a barometer of world demand.
The World Bank on Tuesday cut its 2015 global growth forecasts to 3 per cent from 3.4 per cent because of sluggishness in the euro zone, Japan and some major emerging economies. (With Agency Inputs)