Mining unlikely to start soon in Goa

Leaseholders will have to secure fresh approval for their mining plans before starting operations

While the Union environment ministry has revoked the suspension of clearances (ECs) for mines in Goa, actual mining is unlikely to start soon. According to mining firms, the earliest they can resume production is by the end of April or by early May and that too if the state government starts issuing statutory clearances immediately. However, permissions are not easy to come by and according to indications, mining is not likely to start before September.

For one, the government will have to fix per-mine quota also as there is a cap on total production. “We cannot start the production immediately unless the government tells us how much we can actually produce keeping in mind the 20 million tonnes per annum cap fixed by the Supreme Court. The director, mines and geology will have to fix the individual capacity for each mine before we step forward to take several other statutory approvals before starting production,” said an official with a large company.

In September 2012, then environment minister Jayanthi Natarajan had suspended clearances to all 93 mining leases in Goa after former Supreme Court judge M B Shah gave a report highlighting large-scale illegal mining. Subsequently, mining in Goa, India’s third-largest ore producer, came to a halt throwing 100,000 employees out of their jobs.

Last year, the Supreme Court gave its green signal to resume mining in the state, on the condition that companies get environmental clearances and total annual production is capped at 20 million tonnes.

Prior to the mining ban, Goa had accounted for 47 million tonnes of iron ore and most of it was exported. Goa is the lowest cost producer and exporter of iron ore, although of poor quality containing less than 56 per cent Fe iron was largely exported to China.

The resumption of mining in Goa hinges on several aspects such as reinstatement of EC, fixation of individual mine-wise capacity, approval of mining plans by the Indian Bureau of Mines and consent to operate by the Goa State Pollution Control Board, among others.

UPS AND DOWNS

2012

• Sept 11: Goa halts iron ore mining after an expert panel finds serious illegalities and irregularities in operations
• Sept 12: After a ban on mining, the environment ministry suspends clearances given to 93 iron ore mines in Goa
• Oct 5: Supreme Court (SC) suspends iron ore mining in Goa; M B Shah panel appointed to probe issue
• Nov: Goa govt issues transport ban

2013

• Nov 11: SC maintains ban on iron ore mining, allows sale of 11.46 mt of stockpiles
• Dec: State govt declares all notified dumps (> 765 million tonnes); Goa govt completes process of renewals for a majority of leases

2014

• Feb 17: Goa conducts first e-auction for sale of half a million tonne of iron ore
• Apr 21: SC lifts ban; caps production at 20 mt a year

2015

• March 17: Environment ministry revokes suspension of environment clearance, paving way for resumption of mining

 PROCEDURES TO BE DONE BEFORE STARTING OPERATIONS

Once the environment clearance is handed over to mining lease holders, they will have to get their individual capacities fixed by the state government. Then, they will have to prepare a detailed mining plan and get it approved by the Indian Bureau of Mines. Subsequently, they have to get a clearance from the State Pollution Control Board before starting mining operations.
“Normally, it takes a long time to get all these approvals in place. Now, assuming the Goa government speeds up the process and issues all clearances on their part, it will still take at least 45 days for lease holders to restart mining,” said industry sources.

The Federation of Indian Mineral Industries , the apex body of mining industry, has welcomed the move to revoke suspension of EC. “It is a positive step by the government. Mining provides large-scale employment and the corporates will carry out responsible mining,” said Basant Poddar, senior vice-president.

He, too, expressed doubts over the immediate resumption of mining. “It is not easy to restart mining immediately in Goa because all the mining pits are filled up with huge quantity of water as there was no mining for nearly three years. It will take at least two to three months to de-water these mining pits. The full-fledged mining can start only by October next year,” Poddar told Business Standard.

Meanwhile, Goa-based green activists have opposed the environment ministry’s move to revoke the suspension on mining ban. “It is an arbitrary move by the ministry and done without any reasoning. When the government has not taken any action to study the impact of mining on environment in the past three years, how can the environment ministry revoke the suspension of mining? We will contest the government’s action in the Supreme Court and National Green Tribunal,” said Abhijit Prabhudesai of Rainbow Warriors, a non-governmental organisation.

Even if mining resumes, miners are unlikely to export their ore because of low prices prevailing in the international markets and the 30 per cent duty on exports.

While the mines ministry had recommended lowering the duty for Goa, Finance Minister Arun Jaitley maintained the level in his Budget for 2015-16. Goa iron ore being of low quality, it is largely exported and domestic mills are not eager to use it. Some mills experimented with beneficiation of ore to improve the quality, but the process was found to be costly. Besides, most large mills are geographically away from Goa, making transporting the ore unviable.

The iron ore price has halved in the past 12 months to $58 a tonne, the lowest in recent years, making it difficult for Goan miners to export, analysts said.

“Demand for iron ore is set to soften even more after China recently set its lowest target for economic growth in 15 years. Seeing the current international iron ore prices, it would be difficult for companies like Sesa Sterlite to maintain any margins,” said Monica Bachchan, director, metalogic projects management services, a Delhi-based metals and mining consultancy firm.