Goa iron ore mining might resume soon

Iron ore mining to start soon with rapid clearance of procedural delays

Mumbai  August 6, 2014: Iron ore mining in Goa is likely to resume soon. Chief Minister Manohar Parrikar has said a new mineral policy is to be presented to the legislature by the end of this month.

Nearly four months after the Supreme Court lifted an 18-month ban on iron ore mining, following the report of the M B Shah commission on massive illegalities in this regard, the state government is yet to present a clear mineral policy. However, Parrikar on Tuesday assured the legislative assembly that the revised policy would be presented by August-end, paving the way for resumption of ore mining.

On April 22, the SC lifted the ban and allowed auctioning of 12 million tonnes of unsold stock in phases. It, however, capped iron ore excavation at 20 mt in a year.

Mineral excavation was a major source for the state’s revenue collection. The sector also drove many others, such as shipping and transport.

“Parrikar’s assurance raises hopes of early commencement of iron ore mining,” said Haresh Melwani, chief executive officer of H L Nathurmal & Co, a state-based miner and exporter.

The ban was imposed in September 2012 on a petition filed by lawyer Prashant Bhushan after the commisison led by M B Shah, a retired judge, exposed a Rs 35,000-crore scam involving top companies, politicians and bureaucrats. The ban in Goa came after similar ones in Karnataka and Odisha, followed by partial lifting in both the latter states. This reduced iron ore supply for steel mills, resulting in their rising dependence on imports.

The apex court had banned illegal mining in Karnataka in July 2011. A partial resumption of mines was allowed in April 2013, with a production cap of 30 mt. In Odisha, the state government banned iron ore export in October 2012. It had said mining could be done only for captive use.

“We are waiting for the Goa policy. Post approval, the decks will be cleared to begin mineral excavation,” said a senior official of the Goa Mineral Ore Exporters Association.

Union steel minister Narendra Singh Tomar had on Tuesday presented to Parliament the third comprehensive report of the Shah commission, on illegal mining in Goa, Odisha and Jharkhand. It estimates a cumulative Rs 2,747 crore of illegal iron ore export from Goa in 2000-10. The report suggests recovery of this amount from mining companies, with interest, and initial penal action.

Before the ban, Goa produced only low-grade ore, purely for export; domestic steel mills hesitate to buy this quality. Since China, our largest iron ore importer, banned the import of low grade ore, Goan miners would not be able to export this. Iron ore supply for starved domestic steel mills will, however, improve.

Courtesy: Business Standard