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200,000 iron miners jobless as curbs bite

Small mines close down, big ones gasp for breath amid total ban in Goa and strict steps in Karnataka, Odisha. Sumant Banerji reports.

business Updated: Aug 05, 2013 01:00 IST
Hindustan Times

The beleaguered mining sector in India has seen the loss of more than 200,000 direct jobs and an estimated 800,000 indirect ones due to the decline in domestic iron ore mining, as a result of curbs on mineral-rich states such as Goa, Karnataka and Odisha.

Almost all major companies have laid off workers in the downturn. The largest private sector iron ore miner in the country Sesa Goa pruned its staff by nearly 20% laying off nearly 900 employees.

It has also deferred payment of 25% salaries of the top management and 10% for managerial employees. Its CEO P K Mukherjee took a pay cut of nearly 39% in fiscal 2012-13.

The company has not produced or sold iron ore in last 10 months in Goa due to the mining ban, first imposed by the state government in September last year and subsequently extended by the Supreme Court in October. Mining operations account for 85-90% of Sesa Goa’s total business.

The ban was imposed after a report by Justice M B Shah Commission pegged at R35,000 crore the loss to the exchequer due to illegal mining in the state.
The lay offs in smaller firms which have shallower pockets have been more massive.

“Directly, around 200,000 people have lost their jobs due to either closure of mines or lay offs by companies on account of decline in production,” said RK Sharma, secretary general, Federation of Indian Mineral Industries. “As thumb rule, one direct job creates four indirect jobs so the overall figure would be close to a million.”

Export of iron ore declined from 118 million tonnes in 2011-12 to just 18 million tonnes in 2012-13 and is expected to slide further to around 10 million tonnes in this financial year as a complete ban on mining in Goa, a partial ban in Karnataka and restrictive measures being deployed in Odisha have scuttled mining activity in the three mineral rich states.

“The bigger companies are still surviving and trying not to fire workers but many smaller firms have already closed down and the lay offs there are massive,” said Basant Poddar, managing director, Mineral Enterprises Ltd.