With the onset of monsoon, the iron ore mining business in Goa has come to a standstill with only lumpy ore being transported from the sites to ports.
Industry players like Goa Mineral Ore Exporters Association (GMOEA) claim that 80 per cent of the business will be down, as fines (small particle ore) cannot be laden in trucks and transported to the jetties from where it is ferried to the port by small ships.
Only few mining companies extract the lumpy ore, while rest deal with fines which are low grade, GMOEA executive secretary Swaminathan Sridhar said.
Extraction and transportation of ore becomes difficult during rains due to logistic reasons, he said. Goa is India's largest exporter of iron ore with majority of the extracted earth exported to China, which has become a booming market since 2005. The state has 90 operational mining leases. The clampdown on the illegal mining activity has severely dented prospects of growing exports from the state.
From a record 54 million tonnes of export in 2010-11, before crackdown on the illegal iron ore, the exports had plummeted to 43 million tonnes in 2011-12.
"The indications are that the exports would further be down by 15 per cent for the current financial year," GMOEA Secretary Glenn Kalavampara said, adding that the trends of exports in April-May this year were indicative of the downfall.
He said that 38 million tonnes mining export is projected for 2012-13. "But it may be too early to predict," he added.
The statistics available with the GMOEA indicate that export was around 8-9 million tonnes for April-May 2012, which is less in comparison to corresponding period last year. Not just the economy slowdown in China, but stringent
measures adopted by the state authorities have cut into the illegal mining, curtailing the exports.
The state government had imposed ban on the export of ore from the iron ore stacks, which were dumped in the mining leases. Small-time traders, who were operating without proper licencing, have also been regulated by the state mines and geology department.
The increased export duty is also affecting the business, Kalavampara said. Further, the stringent MMRD (Mines and Minerals Regulation and Development) rules, which are in the process of being amended, may also be one of the risk factors faced by the industry, he said.
In addition, the revision in the royalty paid to the state government is also affecting the ailing industry. The mining industry hopes that it won't be taxed further as the royalty revision is due in the current year, he said.
"Various states across the country want more revenue from mining industry during the revision of royalty. Overall revision will also affect Goa," he said.
GMOEA has demanded that royalty should be at uniform unit rate depending on the iron content of the ore.