Expert Panel Recommends Iron Ore Mining Cap In India’s Goa State

A panel of experts has recommended capping iron ore mining in the Goa state to between 20 and 25 million metric tons a year for the next five years, nearly half of what the state currently produces and exports, reports Business Line.

According to BL, the panel, headed by renowned scientist Raghunath Mashelkar, in its Goa Vision 2035 report, advised that the cap on mining should be between 20-25 million tons a year, exclusive of the mining dumps.

Goa Vision 2035, prepared by the Golden Jubilee Development Council and presented to the Goa state government, would be kept open for public comments for two months.

A sub-group on environment and sustainable development led by ecologist Madhav Gadgil recommended the mining threshold. Reports suggest that the development council said the cap should be imposed from 2012-2017, and reviewable thereafter.

The 20-25 million-ton threshold is based on a detailed TERI exercise that covered mining in the state, but showed adverse impact on air quality, agricultural output, loss of land and water pollution.

Goa, the country’s biggest exporter of iron ore, has projected a 30 percent reduction in exports this year after several mines faced stringent regulations. According to Business Line, the state has shipped 43.5 million tons of ore during the last fiscal year, much less than compared to the 54 million tons exports in the earlier financial year.

It is widely believed that India’s iron ore exports are set to fall to a new low this financial year, because of shortages of the iron ore in the key Indian states of Karnataka, Odisha and Goa. Analysts say high export duty and differential railway freight is also a reason for low iron exports this financial year.

Available figures suggest that compared to 2011-12, which witnessed a year-on-year decline of 38.5 percent in exports at about 60 million metric tons, the current year (2012-13) may see an all-time low of 45-50 million tons.

As MetalMiner has reported before, iron ore exports from Karnataka have been stopped since July 2010. The state government had imposed a ban following large-scale illegal export.

Market observers believe that Odisha, which accounts for a nearly a third of the country’s iron ore output, is also likely to see a slump in production and export this year.

Meanwhile, reports say that the Goa state government has ordered a ban on transportation of iron ore during the current monsoon season (from July to September). The ban has affected the business of steel mills and iron ore companies in Goa state as well as in other parts of the country.

Realizing the effect of the ban on its business activities, Sesa Goa Limited, a subsidiary of Vedanta group (now officially subsumed into Sesa Sterlite) has urged the state government to lift the ban on transportation of iron ore during the monsoon.

Sesa Goa decided to shut down operations at its two plants in Goa because of the ban. A company spokesman was quoted by media reports as saying that the pig iron plant and metallurgical coke plant situated in Amona village of Bicholim Taluka are slated to be shut down.

The company said the plants are being stopped as they are not able to get iron ore from Sesa’s own Codli mines in South Goa after the district collector stopped transportation of iron ore.

By TC Malhotra