Govt to seek lifting of ban on iron ore mining

To explain to Supreme Court the economic impact of the ban

The Ministry of Mines is expected to soon file an affidavit in the Supreme Court (SC) explaining the need to lift the ban on mining in major iron ore producing states, including Goa and Karnataka.

According to the latest data by the Federation of Indian Mineral Industries (FIMI), following the ban, iron ore exports declined drastically by around 70 per cent to 18 million tonnes by the end of 2012-13, against 61.74 million tonnes in 2011-12.

It is estimated the country lost about $10 billion in iron ore exports in the last financial year.

A senior ministry official confirmed the development and said it would be filed before the court in two weeks. The ban on mining in Goa is expected to come up for hearing in the Supreme Court in the second half of September.

According to the official, the government would file an affidavit in the SC showing the data, how much impact iron ore mining had on the economy, and the overall employment and revenue generation for state governments.

Christopher Fonseca, general secretary of the All India Trade Union Congress (Goa), and a member of the Goa Mining People’s Front, confirmed the development. “The SC should allow mining with conditions.”

Recently, Finance Minister P Chidambaram had said the government was keen to get the iron ore mining sector up and running. “We have to find a way to export iron ore. We need to restart iron ore mining,” he had said.

According to Fonseca, the Centre as well as the state government now unanimously want the iron ore mining ban to be revoked. “Goa is already clearing decks for it. The Ministry of Environment and Forests has also put the process on fast track. Now, everything depends on the SC. We are expecting a positive outcome.”

India, which has been the third-largest iron ore exporter in the world, is expected to become a net importer of iron ore in FY14. There has been a constant decline in iron ore exports since 2009-10, when exports stood at 117.72 million tonnes (mt). This came down to 97.6 mt in 2010-11.

The Supreme Court banned mining in Karnataka in July 2011. Goa, which accounted for more than half of iron ore exports from India, is awaiting a verdict from the apex court after the ban in September last year. In Odisha, too, the state government had banned export of iron ore in October 2012. It said iron ore mining could be done only for captive use.

The ban in Karnataka was partially lifted in April this year, but it will take about year to fully resume operations.

The ban had repercussions on the steel industry as well, because iron ore is the main ingredient in steel making. Steel imports jumped 14.6% 2012-13 from just about one% in 2011-12, while growth in export of finished steel slowed down to 14.3% in 2012-13 against 32.56% the year before. Domestic steel production grew by just 2.5% in the last financial year.