Goan iron ore miners to re-start mining in full swing post monsoon

Await increase in quantity allocation to 30mn tonnes which the supreme court scheduled to hear on Sept 27

Amid expectations of over 50 per cent increase in the cap of quantity allocation, iron ore miners in Goa are set to resume post-monsoon operations by the first week of October.

Normally, around 95 iron ore miners in Goa shut down their operations during the monsoon season due to water logging in the minesite and resume operations after the rainy season. But, miners are more enthusiastic this year on hopes for an increase in the cap of mineral excavation under the supervision of the Supreme Court.

While the apex court has already approved a 50 per cent increase in the cap of the quantity allocated to the miners in Goa, the apex court is set to take a final decision on September 27 in this regard.

“We are all set to resume mining in full earnest after the monsoon gets over,” said Shivanand V Salgaocar, president, Goa Mineral Ore Exporters Association (GMOEA) and managing director of V M Salvaoncar & Brothers.

After two years of ban based on Shah Committee report over illegal mining, the supreme court had in August 2014 permitted iron ore mining in Goa with a cap of 20 million tonnes. Since then, Vedanda’s Sesa Iron Ore, an Anil Agarwal Group company, started mining with 5.5 million tonnes of quantity allocation on it and achieved annual production between 1.5-2 million tonnes annually.

“Miners are ready with their plans to re-start post monsoon activities of iron ore excavation. They are waiting for the final order of the apex court, scheduled on September 27, to re-start mining. The Expert Committee set up by the supreme court had given a recommendation to raise cap on the quantity of iron ore excavation at over 30 million tonnes. So, ad-hoc cap was decided at over 30 million tonnes. The apex court, however, is set to take a final decision on this cap on September 27,” said a senior official with the Directorate of Mineral and Geology (DMG), Government of Goa.

Apart from Sesa, a couple of other miners also started mining. But, most mid- and small – size abstained from fresh mining of iron ore due to extremely bearish price and weak demand from its perennial buyer – China.

Sesa, according to trade sources, had sought increase in the quantity allocated to it with argument that the quantity allocated to miners who could not started mining for various reasons, should be allocated to it. Sesa’s proposal, however, was rejected.

“Iron ore prices are low today. But, we don’t have any option. We need to start mining,” said a private miner.

On an annual basis, the state of Goa produced 40-42 million tonnes of iron ore during peak days, ie about 6-7 years ago. So the upper cap can go upto 40-42 million tonnes.

Meanwhile, DMG has put 7.36 million tonnes of low grade iron ore for auction which, according to trade sources, remained unsold in previous auctions. Like in the past, steel companies are unlikely to participate in the auction.