Fitch Ratings warns Indian metal and mining companies may face higher operating costs due to Supreme Court ruling on state-imposed mineral extraction taxes.

Fitch Ratings warns Indian metal and mining companies may face higher operating costs due to a Supreme Court ruling allowing state governments to impose additional taxes on mineral extraction dating back to April 1, 2005. The taxes will be paid over 12 years in instalments, starting from April 1, 2026. Fitch anticipates increased credit risks from weakened EBITDA margins, with steel and mining companies more exposed to state-imposed taxes than sectors like power and cement. The full impact of the court ruling is yet to be determined.

August 19, 2024
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