 "With over 25 MT iron ore ready stock, Goa awaits SC verdict")
“We have a ready stock of 25-30 mt, which is lying idle since the mining ban,” said Christopher Fonseca, general-secretary of the All India Trade Union Congress (Goa) and a member of the Goa Mining People's Front.
The hearing of the Goa mining case is expected to resume on October 22. The state government is to file its reply to various questions raised by the SC during the last hearing in September.
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“We expect mining operations in Goa will restart by year-end,” said Fonseca.
Goa, which once accounted for more than 50% of iron ore exports from India, has seen nil exports since the ban, resulting in India becoming a net importer of iron ore. The apex court banned mining in Goa on a petition filed by Prashant Bhushan after a judicial commission, headed by justice M B Shah, exposed a Rs 35,000-crore scam involving top mining companies, politicians and bureaucrats.
India’s iron ore production declined to 135.8 mt in 2012-13 from 167.2 mt in 2011-12. Total iron ore exports fell 70.25% to 18. 37 mt during 2012-13. There has been a constant decline in iron ore exports since 2009-10, when exports stood at 117.72 mt. This came down to 97.6 mt in 2010-11 and 61.7 mt in 2011-12, according to data by the Federation of Indian Mineral Industries (FIMI).
The SC had banned illegal mining in Karnataka as well in July 2011, but partial resumption of mining operations was allowed in April this year. However, it will be a while before the industry comes back on track. Owing to procedural issues, resuming of mining operations can take over a year.
Although the SC had allowed 117 mines in categories A and B in Karnataka to resume operations, only 10-12 mines have resumed operations so far with the others still waiting for some approvals. “It will take a year before all the mines start operations,” said a person close to the development.
The SC had also cancelled 49 leases in Category C mines, which were found to be flouting norms. These will be re-auctioned by the Karnataka government.
In Odisha, too, the state government banned iron ore export in October 2012. It said iron ore mining could be done only for captive use. In November 2012, it slapped a Rs 50,000-crore fine on companies including Tata Steel Ltd, Essel Mining and Industries Ltd and the state-owned Orissa Mining Corp Ltd.
Anjani Agrawal, national leader (metals and mining) at Ernst & Young, said: “After a year, we expect things to get sorted out. The whole environment has slowed down. Everybody in the government is extra cautious, which is why things are getting further delayed.”
According to him, mining operations in Karnataka will speed up over the year, but it would be difficult to achieve the production levels before the ban. “It would be difficult to even export from there anytime soon,” he pointed out.
R K Sharma, secretary-general, Federation of Indian Mineral Industries does not think the situation would improve in the near future. Sharma, however, is of the opinion that the relief on partial resumption of mining in Karnataka has come at the right time.
The ban on mining had repercussions on the steel industry as well, because iron ore is the main ingredient in steel making. Steel imports jumped 14.6% in 2012-13 from just about 1% in 2011-12, while growth in export of finished steel slowed down to 14.3% in 2012-13 against 32.56% in the previous year. Domestic steel production grew just 2.5% in FY13.
India used to export about 50% of iron ore production, but after the ban in three states, production has taken a hit. Global mining companies such as Vale, Rio Tinto and BHP Billiton have gained advantage on the back of a fall in iron ore exports from India.
The World Steel Association, however, expects the sector to bounce back in India with domestic demand set to grow 5.9% to 75.8 mt in 2013, against last year’s 2.5%, on the back of expectation that monetary easing would support investment activities. In 2014, growth in steel demand is expected to further increase to 7%.