Ramco faces setback as state mining tax may raise costs

At a disadvantage

- Harsha Jethmalani

Mines in Tamil Nadu will now attract additional tax, dealing a fresh blow to The Ramco Cements Ltd, which focuses on south India. Under the Tamil Nadu Mineral Bearing Land Tax Act 2024, the Tamil Nadu government has notified the levy of a mineral-bearing land tax of ₹160 per tonne on limestone in the state, from 20 February. This tax must be paid in advance on dispatch of minerals and is in addition to the royalty charged for limestone mining.

Costs of production for cement makers with exposure to this region will rise, hurting earnings outlook. With about half of its total clinker capacity in Tamil Nadu, Ramco is seen as the worst-affected among its listed peers.