Shares of NMDC, steel stocks faced selling pressure on December 18 as the Siddaramaiah-led Karnataka government tabled a bill to tax mines and mining land. NMDC, JSW Steel, Tata Steel, SAIL stocks were trading in red, with NMDC stock bearing the brunt of the fall by falling 5% as CNBC-TV18 reported that the Karnataka government might hike duty on iron ore.
At 12:30 pm on December 18, NMDC shares were trading 6% lower at Rs 213.49 apiece, the biggest fall in 18 weeks.
Karnataka is an important state for NMDC as it contributes to nearly 35% of the overall mix for the company.
Earlier this month, the Karnataka Cabinet approved the Karnataka (Mineral Rights and Mineral Bearing Land) Tax Bill, 2024, to make provisions for levy and collection of tax on exercise of mineral rights and on mineral-bearing land by the State government.
Steel companies are likely to get impacted due to higher iron ore costs. JSW Steel shares were trading nearly 2% lower while those of SAIL were trading 1.74% lower on December 18.
The Supreme Court earlier, had already approved states to collect mining taxes retrospectively from 2005.
The proposed law is expected to bring revenue of Rs 4,207.95 crore, and tax on land-bearing minerals would fetch another Rs 505.9 crore a year.
The Bill proposes to levy a tax from Rs 20 to Rs 100 per tonne for different minerals.
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