Mining revival in Goa may spur resumption of more Odisha mines

As of now, only 46 out of 143 iron ore mines are operational in the eastern state of India

The resumption of mining operations in Goa after a gap of three years has ignited hope amongst miners and end use industries in Odisha.

Industry observers feel this would spur the Odisha government to speed up opening of more mines now under shutdown in the largest iron ore producing state.

“Resumption of mining in Goa would have positive repercussions on states like Odisha and Karnataka. The domestic steel industry is steeped in crisis due to spate of cheaper steel imports from China, Korea and other countries. Reopening of more mines would ensure availability of iron ore at affordable prices thereby allowing domestic manufacturers to operate at full capacity,” said D S Rawat, secretary general at Associated Chamber of Commerce & Industry (Assocham).

Mining excavation resumed in Goa after three years with the operationalisation of Vedanta’s Codli mine. A ban on mining by the Supreme Court had thrown mining out of gear in that state. The Goa government had imposed a blanket ban on all mining activities in the state, the third largest iron ore producer, in September 2012 on allegation of illegalities. The Supreme Court had partially lifted the ban in April 2014 with a cap of 20 million tonne on output. The Goa government subsequently lifted the ban in January this year.

Commenting on revival of mining in Goa, Abhiit Pati, chief executive officer (aluminium) of Vedanta Ltd said, “I welcome this move. I firmly believe the Odisha government will soon take steps to boost the mining sector especially bauxite excavation. Odisha has 56 per cent of India’s best quality reserve and its proper utilisation will lead to a complete transformation of socio-economic landscape of the state. At full capacity, we can pump in Rs 3,000 crore annually to the state and national exchequer. Its all about creating opportunity at the right time.”

Vedanta runs a one million tonne alumina refinery at Lanjigarh without any captive bauxite leases. It is running the refinery by sourcing bauxite from states like Chhattisgarh and Andhra Pradesh and also through imports from New Guinea. Manish Kharbanda executive director, Jindal Steel & Power Ltd (JSPL) said, “We welcome the decision of the Goa government. The Odisha government has also taken proactive steps to reopen some mines. But punitive action needs to be taken against the merchant miners who do not keep to the stipulated EC (environment clearance) production limits. The scene in Odisha is different from Goa where iron ore raised is only meant for merchant sale. In Odisha, many valued added industries have come up, generating revenue for the government and employment for people. Captive miners need a level playing field since they have invested thousands of crores on their projects.”

In Odisha, the mining and quarrying sector contributes six per cent to the Gross State Domestic Product (GSDP). Mining revenue is also the single largest contributor to the state's non-tax revenue basket. The state collected Rs 5,186 crore from this sector in 2014-15. The state has 11.16 per cent share in the country’s total value of mineral output.

As of now, only 46 out of 143 iron ore mines are operational in the state. Of the 46 operational mines, eight are captive mines while the rest 38 are merchant mines. The merchant mines have a combined production capacity of 106.07 million tonne per annum