Vedanta may suspend mining ops in Goa

Mining conglomerate Vedanta on Thursday said its arm Sesa Goa may suspend iron ore mining in Goa due to the ongoing dispute between the firm and truck operators.

"A section of truck owners' association is demanding a rate of Rs 17.63 per km while the mining firms, already reeling under the impact of a meltdown in iron ore prices and plethora of taxes, have offered to pay Rs 8 per km," the firm said in a statement.

If mining is suspended, this will be a huge set back to the mining operations in the state that had resumed only in August this year after Supreme Court lifted its 2012 ban, the statement added.

"There is no point in mining the iron ore if it cannot be transported. So it is likely that mining operations in Goa will have to be suspended till a lasting solution is reached with transporters," Sesa Goa's A N Joshi said.

At present, Vedanta is the only miner that has restarted operations in Goa.

While 600 truck owners who have agreed to the rate of Rs 8 per km, they are facing trouble in transporting iron ore due to protests from other operators.

The problem, which started in October, has aggravated and some of the truck operators carrying the iron ore have been reportedly attacked and their vehicles were damaged, Vedanta said.

"When international iron ore prices were USD 110 a tonne, we were paying Rs 11 per km. When prices were USD 40 per tonne negotiations started at Rs 6.40/tonne/km. We agreed to Rs 8 when price had dropped to USD 32 a tonne ton. However, iron ore prices have now crashed to USD 20...," Joshi said.

He added that the company is all trying to arrive at an amicable solution so that mining operations in Goa do not suffer.

Given the continuous attacks on the trucks carrying the iron ore, the Goa High Court had ordered the state government to provide police security to the vehicles. Yet, attacks have continued, he said.

"While miners have been grappling with truck owners on the transportation charges, their problems have been compounded by timing restrictions imposed by the high court. Thus, out of 24 hours, the iron ore trucks are permitted to operate for only 9 hours," Joshi rued.

Mining activities in Goa were stopped in September 2012, following the Shah Commission report on illegal mining. In November 2013, Supreme Court allowed the state government to e-auction extracted iron ore lying at jetties and mining plots.

Subsequently, in April 21, 2014, the apex court lifted the ban on iron ore activities in Goa with a cap of 20 million tonnes per year.