MMDR Ordinance a blow for Goan miners

The state's miners will have to vacate mine area for re-auction, FIMI urges to make it uniform for all

The Mines and Minerals Development and Regulation  Amendment Ordinance 2014 is set to prove a big hurdle for 31 iron ore mining companies in Goa. These entities had signed a mining pact with the government of Goa under which the lease was allocated for 20 years. But, the Ordinance restricts them to mine for five years. Allk the companies are reportedly big ones.

The ordinance allows a 15-year lease for captive users and the mining industry has urged this period for all miners. “Also, the right of first refusal should be given to existing lessees at the time of auction of the leases,” said R K Sharma, secretary-general, Federation of Indian Mineral Industries. Companies will have to vacate the mining area after completion of their respective lease periods and apply afresh. The ordinance also paves way for new mining auctions, which may be allocated on lease for up to 50 years.

An independent iron ore mining and exporting company, with a two million tonne annual shipment volume, said of the lease periods specified: “This is too short a period for independent iron ore miners and exporters. There is almost negligible captive iron ore use in Goa. Hence, all mineral allocations will go to new players or the existing miners will have to set up steel mills just for mineral allocation.”

Goa had 90 million tonnes of annual output till recently. Mining was suspended in September 2012 on recommendations from the Supreme Court-appointed M B Shah commission. While the state is rich in natural resources, it lacks processing units and steel mills. Hence, all minerals were transported for processing to other states or exported, to China, before suspension of mining.

The mining industry, however, has urged the government to make moratorium period of 15 years for both captive and non-captive miners.

"From the various recent pronouncements, it is clear that the government has decided the auction of mineral concessions is the only route to be adopted. Taking this as a fait accompli, we suggest that the period of moratorium should be uniform 15 years for captive and non-captive mines since investment in upgradation of mining technology and development of mines being same and is a continuing process, whether they are captive or non-captive. Also, the right of first refusal should be given to existing lessees at the time of auction of the mining leases," said R K Sharma, Secretary General, Federation of Indian Mineral Industries (FIMI)

These miners will have to vacate the mining area after completion of their respective periods and apply afresh for lease holding of the same mine which they may or may not get allocated.

The Ordinance also paves way for new mining auctions which may be allocated to lease holders for upto 50 years. Renewals of these mines, however, could be for a period between 20 and 30 years. Under the renewals, however, over 60 iron ore mines that were operational before suspension in September 2012, would be impacted.

An independent iron ore miner and exporter with over two million tonnes of annual shipment volume, said, "This is too short a period for independent iron ore miners and exporters. There is almost negligible captive iron ore user in Goa. Hence, all mineral allocations will go to the new players or the existing miners will have to set up steel mills just for mineral allocation."

The Ordinance also empowers states to handle illegal mining through all possible channels.