Cancel Goa Iron Ore leases: SC

Central empowered panel suggests survey and demarcation of leases for violations

Goa’s iron ore miners may be off the market for a couple of years due to a Supreme Court-appointed panel’s prescription of the “bitter Karnataka pill” and recommendation that leases found involved in substantial illegality be scrapped.

The Central Empowered Committee (CEC) has suggested that all leases be surveyed and demarcated for violations, a macro-level environmental impact study be carried out to arrive at a carrying capacity threshold, each of the state’s four main mining talukas be equipped with a cap, and each mine with a reclamation and rehabilitation plan before even legal miners are allowed to resume business.

Meanwhile, all mining operations including trading of extraction of dumps stay banned. The entire exercise is still on in Karnataka where mining was banned in July 2011. Only one mine has actually resumed operations. Punitive action against erring officials and compensation for defaulting leases will be spelt out by the CEC later. Ambar Timblo of Fomento Resources, a leading iron ore miner in Goa, said, “The most important response will be that of the state and the central ministries, since in effect the CEC is taking over their job.” In 2010-11, Fomento Resources exported 15 million tonnes (mt) of iron ore from Karnataka and Goa. The CEC report, quoting Goan Mineral Ore Exporters’ Association, said that of the 38.25 million tonne of iron ore exported in 2011-2012, about 14.9 mt (39%) was by Sesa Goa and Sesa Resources, about 7.4 mt (19%) by the Fomento Group of Companies, and about 3.9 mt (10%) by the Salgaokar Group of Companies. Others accounted for the remaining 32%.

Sesa Goa’s managing director, P K Mukherjee, declined comment, saying he is yet to read the report. “I am not denying that illegality was taking place, but such bans kill the industry,” said Ravi Shankar, executive director, Nice Group, which had been exporting about five million tonnes of the ore annually before mining was banned in the state. “Indian iron ore was being used by China to reduce its cost from Australian and Brazilian ore. It is now turning to other destinations in Africa.”

The Supreme Court had imposed a mining ban in the state on October 5, following a writ petition by Goa Foundation, an environmental action group. The writ was based on allegations of illegal mining from the Shah Commission, a government-appointed probe panel that had estimated a loss of Rs 35,000 crore to the exchequer due to illegal mining.

The CEC has recommended that Goa should set up a committee to establish how much mineral was produced legally since FY 2005-06 from the returns filed and royalty paid. The state panel also has three months’ time to ascertain which mines have been run by persons other than the leaseholders or in violation of the Mineral Concession Rules, 1960, a charge against many of the state’s leading miners.

Goa has also been directed to review 42 leases whose delayed first renewals were condoned, and cancel them if judged not permissible. Further, in a blow to the state’s Manohar Parrikar-led BJP government, which wanted to encash on the state’s low-grade iron ore in view of falling global iron ore prices, mining of overburdened dumps outside lease areas has not been approved. The CEC wants Goa to come up with similar environmentally sustainable schemes for overburden dumps.

It also wants the state to create a regulatory mechanism that will track storage, transportation and export of iron ore with provision of transit permits before the ore is evacuated from the mines. The dumps at Goa’s old mines had been piled up outside of the lease areas. These dumps, once considered unviable, now have an export market with improved technology for use of lower-grade ore in steelmaking. The debate was on whether the dumps, too, must be regulated, as mining operations are under plans approved by the Indian Bureau of Mines.


A particular controversy was given the go-ahead to mining within and near wildlife sanctuaries and national parks, despite earlier Supreme Court orders. The Shah Commission had been scathing of the environment ministry’s role in this regard, prompting Minister Jayanti Natarajan to suspend 139 such clearances. (Goa on September 10, 2012 suspended all operations but not trade and transport of ore.) Deeming these approvals (for 19 mines within wildlife sanctuaries and national parks and 23 others within a one kilometre radius) guilty of earlier Supreme Court orders, the CEC wants them revoked. The ministry has also been asked to place another 120 leases within 10 km of national parks and sanctuaries before the Standing Committee of the National Board for Wildlife. The court may also consider the validity of such clearances.

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