The ongoing mining mess in Goa has started hitting the margins of mining companies.
Sesa Goa, the country?s largest producer of iron ore, has already reported 14% drop in its net sales to R790 crore in the second quarter this financial year from R1,125 crore in the same quarter in the last financial year.
Fomento Resources, another mining biggie in Goa that saw its exports grow over 16% last year expects it to come down by over 25% this year.
According to mining firms, the drop is primarily due to loss of confidence among foreign buyers in China and Japan ,which have become apprehensive about the exported iron ore from the state and anticipate a Karnataka-kind ban on Goan mining too.
?We have long term contracts with companies mainly in Japan and China. However, these companies are now uncertain about signing an agreement with us as they are think the government may announce a blanket ban on mining in Goa as well,? Ambar Timblo, managing director of Fomento Resources, said. While the supreme court has already banned mining in Karnataka, in Goa the situation is a little different. The government has set up Justice MP Shah commission to probe illegal mining issues in Goa.
While the iron ore exports have been declining in Karnataka and Goa because of the present mining mess, it has seen a drop even in state like Orissa due to high freight and logistic cost.
The Federation of Indian Minerals Industries in its August data showed that the iron ore exports have fallen 43.4% to 2.65 from 4.68 million tonne in the same period last year. On year on year basis, during April to August exports fell 24.38% to 28.02 million tonne.
?The hype around illegal mining, that is yet to be proved in case of Goa, has hit out businesses. Though there is certainly a need for better checks and balances to curb illegal or excess mining, it needs to be done in a way that it should give negative impression about our businesses,? a Sesa Goa official said.
The centre government has also directed Goan mines secretary S Kumaraswamy to take appropriate measures to control the situation. In a letter to Kumaraswamy, mines ministry has told him that 44 mines in Goa exceeded the said 20% target production limits, and therefore, take actions accordingly.
