File photo: Goa chief minister Pramod Sawant. (PTI)
File photo: Goa chief minister Pramod Sawant. (PTI)

First time since inception, Goa mining could see new players

On Tuesday, when Goa chief minister Pramod Sawant returned from an official trip to Delhi, he came with one message - “We have already taken a decision to form a mining corporation,” he told reporters
By Gerard de Souza
UPDATED ON JUL 25, 2021 11:42 PM IST

On Tuesday, when Goa chief minister Pramod Sawant returned from an official trip to Delhi, he came with one message - “We have already taken a decision to form a mining corporation,” he told reporters.

The chief minister said that the corporation would once again begin mining in full strength - both the mining corporation and auction of mining leases.

“The government is serious about the auction of leases and the restart of mining through a corporation and I have asked the director of mines to work on it on priority,” he said.

Earlier in the day, the Supreme Court pronounced its decision rejecting the Goa government’s review plea to relook its 2018 order cancelling Goa’s leases. It was the state’s last-ditch attempt to restore the status quo ante and resume mining in Goa as if there hadn’t been any cancellation. That move was bound to fail.

Sawant’s announcement was more out of necessity than any conscious choice.

When on February 7, 2018, the Supreme Court of India dropped a bombshell declaring that 88 mining leases renewed by the Goa government across 2014-15 were in effect defunct and cancelled the purported renewals, the Goa government’s first reaction was to attempt a “legislative cure” to the mining imbroglio, that, in simple terms, meant undoing the Supreme Court’s judgement through an Act of Parliament to ensure that the leases were given an extended period of validity.

But with no support from the central government - despite promises to the contrary given by local BJP leaders - the lobbying for a bill in Parliament to undo the SC order failed, leaving the state with no option to look at its remaining two options - a state-run corporation or auctions.

“Through the corporation, we hope to once again begin mining in full strength (through) both the mining corporation and auction of mining leases,” chief minister Sawant said.

Tuesday’s announcement by the chief minister marks a watershed moment for the Goa mining industry. If followed through, it will mark the first time since the beginning of the century-old industry that leases are being allotted afresh and with it the possibility of new players entering the field that has up to now been largely been controlled by dozen-odd family-run mining companies who were beneficiaries of Portuguese granted leases.

It’s no surprise then that such a move is being opposed by Goa’s mining operators who, under the banner of the Goa Mineral Ore Exporters Association (GMOEA), continue to hold out hope that their demands for an extension of the leases be acceded to - hope that now lies on a bunch of petitions before the Supreme Court challenging a decision of the Goa government to deny them a 50 year period of validity dating back to 1987.

“The main petitions and SLPs (special leave petitions) filed by Vedanta and Geetabala Parulekar (another leaseholder) are listed to be heard, which are on the basis of leases being valid till 2037. We remain optimistic that we will place the legal positions before the Supreme Court and mining will eventually restart,” the GMOEA said in a statement.

“Furthermore, as has already been placed before the Supreme Court by the state and central government, auctions are not possible in those areas, where the challenge to the Abolition Act (The Goa Daman and Diu Mining Concessions Abolition Act, 1987) is still pending,” the statement read.

Being the predominant industry in Goa, the mining industry has had a disproportionate clout over Goa’s political affairs and is alleged to have built and destroyed several political careers and governments over the decades.

It is no surprise then, that the Goa government has, over the last few years, sought to protect the industry’s interests and ensure that the status quo is not disturbed. In a policy document brought out in 2015 after the Supreme Court first allowed resumption of mining after the 2012 ban, the then Goa government did its best to avoid auctions - something that could bring in players from outside the state into Goa’s mining industry.

“While there cannot be any gainsaying that the mode of the auction could have brought in possibly and probably a greater revenue share for the state of Goa on account of the competitive bidding and the consequent match-bids, it has also certain risks involved in it, namely it would have involved inviting unknown business interest, often referred to as mining mafia,” the Goa government’s 2015 Grant of Mining Lease Policy stated while justifying the government’s decision not to opt for auctions back then.

It was the leases renewed under this policy of 2015 that were struck down by the Supreme Court bringing mining to a halt once again and taking the state back to square one.

According to the Goa Foundation, whose petition resulted in the cancellation of Goa’s mining leases, the Goa government’s decision has come six years too late. If instead of renewing the leases, the state had to opt for auctions back in 2014 itself the industry would have restarted faster.

“The (minerals in the) state should be reserved for public sector mining through a PSU as that is the only way to ensure zero loss in the present legal framework. Proposals being made... for the issue of an ordinance are intended to return the mining leases into the hands of the private lease-holders. The move will not survive judicial scrutiny or review. It will also further delay the restart of mining activity in the state,” the Goa Foundation had recommended back in 2018.

The Goa Foundation has been advocating that the quickest way to resume mining in the interest of the dependents, that also respects the notion of intergenerational equity in which publicly owned assets, if they are to be extracted, the proceeds be stored in a sovereign fund the interest of which is used for the benefit of the state, would be to resume mining through a corporation. But the Goa government wasn’t enthused. Until now that is.

But not everyone agrees that allowing the immediate resumption of mining, either through a corporation or through auctions, is the best way forward.

“Our generation has already mined the share of 100 generations and more. We cannot rob our kids anymore. And leave them the costs and destruction. Let there be no mining for 20 years, our kids will then decide. If you cannot agree, then let mining be owned and run by all-inclusive, equitable village cooperatives, where children, elders, farmers and women will decide how much to mine, if at all,” Abhijit Prabhudesai, an environmental activist, said.

One possible hurdle to resuming mining in Goa is a plea challenging the Central Government’s Act converting Goa’s mining concessions granted by the Portuguese into leases under the Mines and Minerals Development Act is currently also pending before the Supreme Court.

“Pending adjudication of the legal issues involved there will always remain an inherent legal uncertainty on the title rights of the mines if granted as per the directions passed by this Court as the original title of rights is still under litigation,” the Mines Ministry said in an appeal before the Supreme Court.

For now, Goa chief minister Pramod Sawant brushed aside those concerns. “Whatever decision we take for now will be subject to the outcome of that petition. We will go ahead with the corporation,” he said.

The mining industry was a major revenue and employment generator for the state and at its peak contributed close to 15% of the state’s GDP. The state used to export 54 million tons per annum before the ban came into effect in 2012 as a result of the Shah Commission report.

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