Goa mines return to new ground reality | business | Hindustan Times
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Goa mines return to new ground reality

Now that the Supreme Court has lifted a 19-month-old ban on mining in Goa, HT looks at the nitty gritty of the order, and how soon can the state start shipping out iron ore. Goa mining won’t start just yet

business Updated: Apr 23, 2014 01:07 IST
Gaurav Choudhury

What has the Supreme Court said on the issue of Goa mining?
In a ruling on Monday, the Supreme Court has lifted a one-and-a-half year old ban on iron ore mining in Goa, but with a cap of 20 million tonnes (mt) a year — the cap is less than half of the state’s original output. The court also said a court-appointed panel will submit an environment impact report after hearing a case on environmental degradation and illegal mining. The final capacity that will be allowed to be mined will be decided by the expert panel within the next six months.

How will the industry benefit?
The ruling has raised hopes for an early start of the export of iron ore from Goa to major export destinations, primarily China.

How soon are the exports expected to start?
Industry members and analysts are of the view that iron ore exports from Goa aren’t likely to start anytime soon because of variety of reasons including waning demand in China, the world’s largest steel market. The ongoing Lok Sabha elections are also likely to delay the start of mining. Any decision to grant environmental clearances to mines will only be taken after a new government assumes office. All clearances granted to mines have been kept in abeyance since 2012. In addition, the state government will also have to grant necessary approvals before mining can start. Besides, mining in India is a seasonal activity. Mining comes to standstill during the monsoon season beginning June.

What are the other conditions set out by the Supreme Court?
A special forest bench headed by Justice AK Patnaik said the panel would also advise how the extracted dumps are to be utilised. Further, no mining lease would be granted around one kilometer of national parks and wildlife sanctuaries, the court said, directing the ministry of environment and forests (MoEF) to identify such eco-sensitive areas. It further said there cannot be deemed renewal of lease after 2007.

Goa government has also been ordered to formulate a scheme within six months for utilising the funds generated by e-auction. Workers on rolls for all mining firms will be paid 50% of the wage during the period for which they were out of work due to the SC stay order.

SC had on March 27 reserved its order on putting the annual cap on volume of iron ore to be extracted in Goa. The court had made clear that it cannot go into the policy matter and will only address the regulatory aspects involved in it.

How important is iron ore mining for Goa’s economy?
Mining accounts for nearly a fourth of Goa’s GDP and around 70,000 people are directly dependent on it. The ban had paralysed Sesa Sterlite, India’s largest iron ore producer, which will be the biggest beneficiary of Monday’s judgment. Before the ban was imposed in 2012, Goa was producing about 45-47 mt of iron ore. There about 95 iron ore mines in Goa. Most of these mines produce iron ore fines that are mostly used in steel factories in China, which have the know-how to blend low-grade fines with higher-grade mineral from Australia and Brazil to fire their plants

What are the latest trends in global iron ore prices?
Global iron ore prices have come down from its peak in 2012 when the ban was imposed.

At $113.3 per tonne, prices of global iron ore fines with 62% iron content are currently ruling at about 18% lower than a year ago.

Read:Goa mining won’t start just yet