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Indian iron ore mining mess - How the mining ban has hit Goa truck economy
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Saturday, 15 Dec 2012

Almost every house in the vicinity of an iron ore mine in Goa's Sanguem, Sattari and Bicholim talukas is likely to have a 10 tonne tipper truck parked in its backyard. Some have 2, 3 or even 4 trucks parked. In all, there were about 25,000 such trucks serving the iron ore industry in Go.

Until recently, these trucks ferried ore from the mines to ports and other locations.

That changed in September, when mining operations came to a standstill after a temporary ban imposed by the state government. The trucks are now idle.

On December 7th, an expert panel set up by the Supreme Court recommended cancellation of 42 iron ore mining licenses in Goa.

The truck economy was one way for the mining industry to share the spoils of this highly ecology insensitive industry with the local people. Mainline companies such as Sesa Goa, Fomento and Lithoferro offer trucking contracts to locals affected by the mining.

The iron ore industry has been accused of destroying the ecology of the region. Mr Anthony Fernandes, a resident of Codli in South Goa district, has been protesting the destruction of water tables by mining near his house. The well on his property goes dry in March. His daughter Pearl, 21, has been writing to newspapers complaining about the practices of the mining industry.

Yet, there are two trucks parked in the property. Mr Fernandes said that they belong to his sister. They do not have space to park.

Apart from causing pollution and blocking roads for hours on end, the trucks were said to be responsible for one death a day in the state.

How does the mining industry share its profits through the trucks? A truck costs around INR 12 lakh to INR 14 lakh and EMI on the loans cost around INR 30,000 or so every month. These loans are guaranteed by the mining companies. The owner of the truck easily earns around INR 12,000 to INR18,000 a day for about 160 to 170 days in a year. After paying EMIs, the driver's salary and the fuel costs, the truck owner makes INR 16 lakh to INR 18 lakh a year. That is around INR 1.5 lakh a month. In some of the busier mining areas it is even more.

Mr Vijay Kumar Uday Desai a farmer at Pissurlem said that in addition to trucks, the locals often also invest in mining equipment. They do not even need to buy. They can lease it and then lease it to mining companies at an even higher fee.

Mr Desai said that "This easy money is destroying us. While he protests mining, members of his family have invested in trucks. We were a group of nine friends in school, and today five of them are dead. The easy money led to drinking and gambling that killed them."

Source – Business Today


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