Vedanta seeks increase in iron ore production cap in Goa

Two of firm's 10 mines in the state are operational; Vedanta wants a share of other miners' quota

Vedanta Ltd has urged the Goa government to raise the iron ore production quota in the state.

The company has 10 large and small iron ore mines in Goa, of which two are currently operational, after it got environment clearance from the state government. Vedanta had announced reopening of its Codli mine in the state on August 10, after it was shut following a Supreme Court order. Later, Bicholim mine has also started operations. However, the remaining eight mines remained shut, after a cap was slapped on the maximum output.

Early this year, the apex court had granted permission to the government on a condition that the total 98 mines in the state should not exceed accumulative iron ore annual production of 20 million tonnes. The court empowered the state government to allocate quantity as per miner’s capability and past record. Following this, therefore, the government put a ceiling of 5.5 million tonnes of annual iron ore production on Vedanta Ltd, owned by billionaire Anil Agarwal.

“As against the 12 million tonnes of our annual production earlier, we have been given an upper production ceiling of 5.5 million tonnes, a decline of 55 per cent. We have been given a production number, which is much lesser than our capacity. We would certainly continue to look at how to increase this number. But, the important thing is how to get a revised number from the government. We have been meeting with state government officials almost on a weekly basis to get a higher production number. We are hopeful to get it,” said a senior Vedanta official.

Earlier, the company was producing 12 million tonnes annually. The company has been looking to increase the production. Also, Vedanta has adopted various cost-cutting measures, including retrenchment of employees, for survival.

While allowing iron ore mines to resume operations in Goa, the Supreme Court, in its order, prevented miners from dumping waste outside the minesite.

With this, only a few mines are expected to re-start mining operation in the state. Thus, Vedanta is looking at the production quantity of non-operational mines.

In case, the government misses the target of 20 million tonnes of annual iron ore production, the state would incur losses in its revenue in the form of royalty and other state levies.

“Hence, the state government would not like to produce less than 20 million tonnes annually. Thus, we are hopeful to get some additional quantity,” said the Vedanta official.