Vedanta hopes to mine 5.5 mn tons of iron ore in Goa

Vedanta, India's largest private mining company, hopes to mine 5.5 million tons of fresh iron ore from its mines in Goa this year, a top company official said on Monday.

Vedanta's iron ore division CEO Kishor Kumar also said that in face of iron ore prices nose-diving, the company is faced with a challenging task of getting back on road to recovery.

"We also are faced with an arduous task of recovering our fixed costs and look forward to a complete utilization of the manpower and resources," he was quoted as saying in statement issued by the company.

The company said that it expects to mine 5.5 million tonnes of fresh iron ore from its Goa mines, but the low grade ore is not used by domestic steel makers, and most of it will be exported by March 2016.

On Monday, after a gap of three years, the company exported its first assignment of 88,000 tons of iron ore to China.

All mining activity was banned in Goa since 2012 following multiple closure orders from the state government, and central government, before it was eventually banned by the Supreme Court in the same year, after the Justice M.B. Shah Commission exposed a Rs.35,000 crore illegal mining scam in Goa's mining sector. The commission's report indicted a nexus of Goan politicians, bureaucrats and mining companies for allowing illegal mining at mammoth scale.

While the Supreme Court ban was lifted in 2014, mining activity was resumed eventually in 2015 due to the time taken to draw up the state government's mining policy as well as due to the delay incurred to obtain necessary permissions and licences for resumption of excavation or iron ore.

According to Kumar, despite the resumption, the road ahead was challenging.

"This achievement of resuming operations after three years of suspension on mining activity, is with multiple/ significant challenges. Iron ore prices are in free fall and are nose-diving," he said.

At its peak, Goa exported nearly 54 million tons of iron ore in 2010-11, netting over $7 billion in foreign exchange.