Goa exporters see SC's iron ore verdict as a setback

This, as they will have to pay for iron ore to export it

The Supreme Court’s permission for e-auction of 11.46 million tonnes of iron ore already mined in Goa is seen as a setback by exporters in the state.

“The judgment is a setback to Goa’s exporters, as they are not being  allowed to export the ore they had mined, and the money raised through the auction would be deposited in a separate account,” said Glenn Kalavampara, secretary, Goa Mineral Ore Exporters’ Association (GMOEA).

According to him, the ore, mined till September 2012, was seized by the state government after a ban was imposed on mining by the apex court.

The apex court said a monitoring committee would conduct the e-auction and deposit the proceeds in a separate account after deducting the royalty and trade taxes. This means the mine owners would get neither the money nor the ore. “If they want it, they could get it only through auction,” said Glenn.

Experts said the iron ore produced in the state used to be exported, as it was not being consumed by domestic steel industry due to its inferior quality.

Ever since the ban on mining, traditional exporters have been out of business.

Now, with the Supreme Court giving the go-ahead, exporters fear new players would enter the field, complicating the situation. “Entry of new traders will only complicate the exports business for which viability and other issues are not known at present,” added Glenn.

GMOEA has 22 members, of which half used to export 80 per cent of production.

Jayanta Roy, senior vice-president and head of metals and mining, ICRA, said, “Goan ore is largely exported due to its inferior quality. The Supreme Court directive on e-auction may not readily benefit mines, as auction proceeds will be kept in a separate account. Moreover, it is uncertain how much of exports will be achievable, considering the 30 per cent export duty on Indian ore and the fact that Chinese buyers have made alternative arrangements for iron ore imports in the past year,” he said.

He also said there could be a cap on mining quantity in the state. A committee should be formed to make suggestions in this regard, he said. That would ultimately have a huge impact on the future of the iron ore mining industry in the state, he added.