The INR 17,000 crore Goan mining industry, that supports more than half of India’s iron ore exports, is facing a crisis. Just as annual earnings had begun skyrocketing at the back of Chinese hunger for the mineral, the current allegations of largescale illegal mining have threatened to engulf the miners’ existence. While the ongoing inquiry by the Shah Commission will cleanse the system from within, jumping to conclusions should be avoided, Mr PK Mukherjee MD of Sesa Goa Ltd in an interview with Sudheer Pal Singh.
Q - As the largest iron ore producer in the private sector, how do you assess the current mining crisis in Goa?
A - When you see judgments being passed by certain sections of the media, without giving a fair chance of defending, one feels hurt. We do not know yet whether the investigation has been concluded or is still going on. If no, are we not pre-empting the conclusion? It's like holding somebody guilty unless he proves his innocence. But there are always some positives in a development. I am sure the current situation will force the miners to revisit some of their ways. In one way, it is an audit by a third party. This fine-tunes the process. I would refrain from commenting on the Shah Commission, but if you have to keep your spine straight, you have to go through this trouble or investigation. You feel hurt because you are being pronounced guilty even before the inquiry is over.
Q - Is illegal mining taking place in Goa?
A - In general, I would say, yes. When you see the way quantities are getting exported, particularly last year’s export figure of 54 million tonne, you get a general feeling there may be some illegalities. For instance, the quantity exported is far more than the environment clearance limit; even considering dump working by the leaseholders currently operating the mines, the quantity appears on the higher side.
Also, there is a huge mismatch between the number of registered miners in Goa and the number of exporters. This raises questions. Where are the rest of the exporters getting ore from? Normally, a miner would not want to sell domestically through many trading routes. Any miner would at best employ only one- two local traders for exporting ore, if he does not have marketing ability. In fact, originally, all Goan miners had Japanese contracts. Supply to Chinese customers is a relatively recent phenomenon. To my mind, all traditional miners directly export and not through Indian traders.
Q - Is the confusion over what constitutes illegality also a reason for the current crisis?
A - What is the definition of illegality? I presume illegality consists in committing an act where malafide intent is involved and the law has been defied intentionally in a routine manner. The legal compliances required by miners here are one of the highest. Maximum laws are applicable to this sector and there are various authorities who ensure compliance. Every law prescribes different treatment for different levels of undesirable acts.
I would expect that, for an inquiry happening at such a large scale, authorities should list an inventory of various people’s illegalities as they currently exist and then grade it. This would allow a more realistic view to take shape. There is no point in talking only about negatives.
Q - This approach may work in case of minor irregularities. According to authorities, more than 90 per cent of the mines in the state are involved in illegal activities.
A - Even in Karnataka, the illegalities were of a major nature. But it was recommended that around 24 mines should be first cleared. Illegalities committed by a few can also be considered as 'major' in a given context.
Q - What is the broad canvas of illegality in the context of the Goan crisis?
A - There are many allegations being made. For example, that the miners are exporting more quantity than permitted under EC, that leases are not renewed in time, that there are irregularities arising from forest issues, lease area violation, placement of dumps outside the mining lease. Also, where three-four leases of the same mine owner are contiguous which has legacy from the Portuguese regime and EC has been given for all of them together, miners are being asked to maintain boundaries for individual leases.
Q - There is also the allegation that for a large part of the ore being exported, royalty has not been paid.
A - This, if it is happening as a routine, is a blatant case of illegality. Every company or leaseholder has to reconcile royalty payment. But in cases of mismatch, the intention and the extent of the damage has to be looked at. Because all these complexities are making the situation difficult, the top-level management of miners is doing everything else other than business for the past few weeks. A lot of time is going in replying to notices. Every government department has started issuing one or the other notice.
Source - Business Standard
