In September 2012, Goa went the Karnataka way. First, the Goa government, and subsequently, the Supreme Court (SC) ordered a ban on iron ore mining operations across the state due to environment and encroachment concerns, bringing to halt the state's annual production of over 40mn tons of iron ore. With mining contributing to 30% of the state's revenues, this ban has hit the state hard. This is the VERY FIRST hard-hitting ground report for which I traveled to the dusty mines and government offices across Goa, to bring to light the implications of the issue on the mining industry.
The Central Empowered Committee has recently submitted its report on illegal mining in Goa to the SC and it doesn't contain much good news for the industry. In fact, with the resumption of operation nowhere in sight, the state's mining industry is reaching breaking point.
(Insert: Shot of Sesa Goa's mine)
Three months ago this mine by Sesa Goa was one of Goa's busiest mines. Every year 4.5 million (mn) tons of iron ore was mined here, and this placed was abuzz with 1500 employees who worked here every day. But now, with the ban on iron ore mining imposed in Goa since September this year, there's only a deafening silence.
Sesa Goa is not alone. Mining has stopped in all 90 working mines across Goa following the state's and the Supreme Court's orders, consequently bringing to halt the state's annual production of 40mn tons. Further, the SC-appointed Central Empowered Committee's (CEC) recent recommendation that mining should not resume in 42 of the state's mines because of environment and encroachment concerns is only making matters worse for the ailing industry. So is the CEC's insistence that the Reclamation and Rehabilitation Plan be implemented by companies before resuming mining.
Ambar Timblo, MD, Fomento Mines which is one of the large mining companies in Goa says, "From end of May-June of every year till September mining is shut down in Goa because of the monsoon. So the suspension came at a very difficult time because it was a restarting of the season."
The situation is grim especially for Sesa Goa, which mines around 14mn tons annually, a third of Goa's total production. Its production in the first half of this fiscal has dropped by 32% from 5.5mn tons last fiscal to 3.7mn tons this fiscal, prompting PK Mukherjee, MD, Sesa Goa to share, "If it is partly shut, partly open then there is question of quantification. There's nothing to be quantified. Everything is shut. Our mining revenue is zero."
The ban has also set off a Rs 500cr shortfall in the state's revenues this fiscal, cutting the state off revenues of Rs 1250cr and the central government off taxes of Rs 6500cr. But the Goa government seems more concerned about the unemployment arising out of this ban and is working on an action plan to scrutinize all mining leases.
Manohar Parikkar, Chief Minister, Goa is seeking time. He says, "It is the constitutional right of the elected government to govern. So please allow me to govern. Allow me to do the things to clean up the matter because I have been voted for that. I'm accountable to the people."
Principal Secretary of the Government of Goa, RK Verma is aware of the challenges that loom ahead, "A large number of families are dependent on mining. Now state government cannot suddenly find jobs for them in one day."
Miners at their end are hoping for some relief when the Supreme Court hears their case next month. CEC has recommended the implementation of the Reclamation & Rehabilitation plan before allowing miners to start mining operations in Goa. But given that this process would take over a year to complete, miners intend to appeal to the SC to allow mining to resume, while simultaneously bringing in measures to keep mining irregularities at bay.