Barely four months after re-commencing iron ore mining in Goa, mining conglomerate Vedanta finds operations almost at a standstill, due to a long strike by truck owners.
After the Supreme Court okayed a lifting of its earlier ban on mining in the state, Vedanta’s local arm, Sesa Goa, was the only one to have been allowed and able to resume operations, at 11 mines. It had offered Rs 8 a tonne-km to truck owners, less than before the mining ban but ore prices have also crashed since. While there are some truck owners ready to accept the rate, others do not and are using violence to enforce this, the company alleges. In addition, some opposition parties in the state are supporting the stir.
As a result, ore mined so far is not being allowed to be moved to the port or elsewhere. “While everybody in the government is saying they want mining, the (main) opposition party has supported the agitation. If the government would resolve this agitation, we would re-start mining with full speed,” said a senior company official.
Vedanta has mined around 500,000 tonnes of ore so far from its operational mines, of its total allocation of 5.5 million tonnes (mt). “We are ready to achieve full production, provided transportation resumes,” said the official.
Nearly 100 large and small miners are currently registered with the government of Goa but are yet to resume operations. Mining was contributing significantly to state revenue before the ban, imposed in late 2012 for about two years. Following irregularities in the sector, the SC had stopped all operations and subsequently fixed 20 mt of ore output in the state every year. Vedanta was itself mining a little over 20 mt before the ban; as mentioned earlier, it cannot now do more than 5.5 mt a year. The pre-ban output in Goa was nearly 95 mt a year. Primarily a low-grade variety, it was exported to China (for steel making).
A number of new taxes and levies have since come into place and the actual income for mining companies, says the trade, is only about half of the present global price of $21 a tonne.
Vedanta has been asking the state government to allocate to it the quotas it would be giving to other medium and small-size mining companies, so that the the state can achieve the 20 mt fixed, earning royalty and taxes accordingly. “The quantity is fixed on a pro rata basis and, hence, cannot be transferred without approval of the Supreme Court,” said a senior official with the state's directorate of mines and geology.