1. Goa Mining Impasse: Digging for a solution

Goa Mining Impasse: Digging for a solution

One proposal could be to accept the existing mining leases as automatically extended under the provisions of MMDR Act, 2015, which, inter alia, provides for extension of leases for non-captive mines minimum up to 2020

Published: March 13, 2018 3:31 AM
goa mining, mining, digging, goa economy One proposal could be to accept the existing mining leases as automatically extended under the provisions of MMDR Act, 2015, which, inter alia, provides for extension of leases for non-captive mines minimum up to 2020

Goa is not known only for its heavenly beaches, its food and its culture, it is also known for its iron ore mines that have been in the news for quite some time—for both good and bad reasons. Iron ore is a prime mover of Goa’s economy. Like blood in a human body, it moves through Goa’s roads by trucks, its rivers by barges and finally the Arabian Sea by ships to the overseas destinations in China and Japan. In the process, it earns valuable foreign exchange, which went up to $7 billion at one time, but for which India’s current account deficits would have been unmanageable, resulting in depreciation of rupee and rise in prices. The mines also provide employment in a state that does not have any other industry, except tourism to provide jobs. The mines in Goa also contribute handsome revenue to the state exchequer. The iron ore mines in Goa are also blamed for adversely affecting Goa’s environment, including its air, water and forests. The mines are accused of violating the laws and extracting undue favour from the state administration. One would wonder whether these mines are really assets or liabilities for the nation. The history of iron ore mines in Goa is somewhat different from other mines elsewhere in India. Iron ore mining started in Goa mainly after the World War-II when the state was under the Portuguese rule. The mines enjoyed perpetual lease. In 1987, the perpetual concessions were converted into 20-year lease, which expired in 2007. Most of the mines applied for renewal of leases, but the government possibly did not come forward to do the needful because it could not decide on an acceptable level of stamp duty.

In 2010, the Union government formed the MB Shah Committee to inquire about the issues relating to the illegal mining. Justice Shah submitted two reports in 2012, alleging wide spread illegal mining in Goa. The state government suspended all mining operations in the state from September 11, 2012. In April 2014, the apex court allowed resumptions of mining operations of Goa subject to the condition that the mines would not produce more than 20 million tonnes of iron ore per annum. Meanwhile, based on an order passed by the Bombay High Court, the state Cabinet, in an attempt to regularise the period since 2007, decided to grant second renewal of mining leases to 88 miners, retrospectively. Accordingly, between November 15, 2014 to January 12, 2015, 88 mining leases were granted second renewal. Incidentally, on January 12, 2015, the Mines and Minerals (Development and Regulation) Amendment Ordinance was promulgated, bringing in new conditions for the grant of mining leases. The Supreme Court, in its order dated February 7, 2018, questioned the validity of the decisions taken by the state government, and termed its actions as taken in ‘undue haste’. The SC stated that the state should have granted fresh mining leases instead of granting second renewals to the existing leaseholders. The fresh environmental clearance in respect of grant of fresh mining leases was also to be taken. The apex court also observed that the state of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction. The SC finally directed that all iron ore mining operations in Goa should be stopped from March 16, 2018, until fresh mining leases and fresh environmental clearances were granted.

Accordingly, all mining operations in Goa will come to a halt this month. The mines had earlier been shut down between 2012-2014, and had just started production within the limits prescribed by the apex court. In 2016-17, the mines had started exporting ore and contributed `400 crore to the state exchequer. However, export market of low-grade ore has no longer remained as lucrative as it was in the recent past. China, which was the main customer of low-grade iron ore, has been more selective, but then it will still be possible to export Goa’s low-grade iron ore, though on a limited scale only, during the next few years before its economic value erodes further. Closure of mines at this stage can have a very adverse impact on our national economy, which has hugely benefited from the earnings foreign exchange that Goa mines made. The opportunity lost now may not come back again. One proposal could be to accept the existing mining leases as automatically extended under the provisions of MMDR Act, 2015, which, inter alia, provides for extension of leases for non-captive mines minimum up to 2020. As the grant of second renewal of leases to Goa mines has been cancelled by the SC, the restoration of status quo ante, leading to automatic extension of the mining leases can be a viable option. This will avoid any interruption in mining operations. The Goa miners will have to sincerely act during the interim period to set the most acceptable standards of environmental protection by clearing dumps and restoring the mining pits. After all, mines are national assets and none can afford to destroy a city just because it generates garbage and emits greenhouse gases. The judgment of the SC is a lesson for all concerned. The parties involved must go back to the court for allowing operations under the provisions of  the Mines and Mineral (Development and Regulation) Act, 2015, and promise to go by the apex court’s directive for going for fresh leases when the time comes. That would be the best option not only for Goa, but also for the nation.

Rana Som
Former chairman, NMDC and Hindustan Copper. Views are personal

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  1. Sarvotham Hari
    Mar 13, 2018 at 2:38 pm
    One thing everyone misses in this episode is that deemed extension up to 2020 will perpetuate past illegal licences thereby cornering and underestimating royalty..a virtual loss to Goa govt.... this is the time to rectify the illegalities before extension of license... better everybody crying se realizes this...

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