The Telegraph
Tuesday , April 22 , 2014
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Court drills life into Goa mines

New Delhi, April 21: The Supreme Court today lifted a 19-month ban on mining in Goa, the top iron ore-exporting state, a move that will put more pressure on global prices although it capped annual output in the state at 20 million tonnes (mt).

The additional supply from Goa, which exports nearly all of its output, would add to an expected surplus of iron ore this year as big mining companies such as Rio Tinto and BHP Billiton boost production while demand from top consumer China slows.

A three-judge forest bench of Justices A.K. Patnaik, S.S. Nijjar and Ibrahim Kalifulla passed the order.

The ban was imposed in 2012 as part of a drive to curb illegal mining in Goa. It was lifted on the recommendation of a panel appointed by the Supreme Court to look into the mining industry.

The court also passed a slew of directions for the ministry of environment and forests and the Goa government to regulate mining activities in the state till the expert panel submits its final report (See chart).

The court also clarified that those who had not applied for the renewal of licences after 2007 would not be able to carry out any exploration.

Goa chief minister Manohar Parrikar had on a number of occasions expressed his displeasure over the ban.

Parrikar today welcomed the decision to lift the ban: “I am yet to see the entire order but what I have learnt from primary reports is that we are allowed to mine up to 20mt. I welcome the Supreme Court decision, which has agreed with our main plea to restart mining activity.”

“The state should be given responsibility to put checks and balances on the mining industry,” he said, adding the ban on mining had resulted in a 25 per cent slide in state revenue.

In 2012, the apex court had imposed the ban on the basis of Justice M.B. Shah Commission report, which said the state had lost a staggering Rs 35,000 crore because of illegal mining over a 12-year period. The court had also restrained the companies involved from exporting and selling ores that had already been extracted.

The court passed the order based on a public interest litigation filed by an NGO, Goa Foundation, seeking a probe into illegal mining activities in the state.

The lifting of the ban will help revive economic activity in Goa, the Federation of the Indian Mineral Industries (Fimi) today said.

“It is a very good thing to happen. This will bring the mining industry back in Goa. It will create employment and boost economic activity,” Fimi secretary-general R.K. Sharma said.

A ban on production and exports in Goa, coupled with similar curbs in Karnataka, have sliced India’s iron ore exports by 85 per cent, or 100 million tonnes, over the past two years. India was once the third-largest exporter of iron ore, but has now slipped to No. 10.

“In itself 20 million tonnes is not a huge amount, but it’s just another contributor to rising supply,” said Graeme Train, commodity analyst at Macquarie in Shanghai. The question to ask, said Train, may be whether Chinese steel mills would be willing to take on the low-grade iron ore from Goa, given Chinese producers’ preference for higher quality material, in step with Beijing’s anti-pollution campaign.