Mining in Goa cannot resume before October: Official

Even after the renewal of 72 mining leases by the Goa government, mining may not begin before October due to a combination of factors including the forthcoming monsoon, unfavourable market conditions and a steep tax regime, a top mining official said on Thursday.

Despite the lease renewal which had been expeditiously cleared by the BJP-led coalition government in Goa, the industry was not gung ho about resumption of mining-related operations immediately, Goa Mineral Ore Exporters Association's (GMOEA) S. Sridhar told reporters.

"It can only start by October because of the monsoon... There are other factors too, which is the market is not good right now and the 30 percent export tax on iron ore is very steep. We have asked for a reduction of the tax, but it has not happened yet," Sridhar said.

The GMOEA is an association of major iron ore exporting companies operating within the state.

Mining in Goa was stopped both by the state and central governments in 2012 following a Rs.35,000 crore mining scam which was unearthed by a judicial commission appointed by the union mines ministry, before the Supreme Court banned all mining activity in the same year.

The ban was eventually lifted last year, but mining could not be restarted because of the formalities which also involved the renewal of mining leases by the state government. Incidentally, this has been challenged in court by a green NGO.

Sridhar claimed that even after all the formalities are completed, the prevailing market conditions and the tax regime were proving to be a deterrent for quick resumption of mining, one of the state's biggest sectors.

"It will be uneconomical to mine with a 30 percent export tax. That will have to go if the mining industry in Goa is to resume operations," he said, even as global iron ore prices have slumped to about $50 per tonne from nearly $200 per tonne four years back.