Fear of possible ban on exports of iron ore from Goa has divided the mining industry in the state with the larger, organised players blaming the unorganized companies for the mess.
Mr PK Mukherjee MD of Sesa Goa said that "The problem is that there are too many players in Goa who are not miners and don't own a lease. These firms are involved in the export of iron ore. By bypassing royalty, these traders can earn about USD 100 for every tonne of ore they export.”
According to Mr Ambar Timblo MD of Fomento Resources, about 60% of the 180 to 185 traders of iron ore do not own iron ore concessions. These new entrants, however, account for 8 to 9% of the volume of ore traded. Goan ore is mostly exported as it is not used by local Indian companies due to its low ferrous content.
According to Mr Shivanand Salgaocar MD of V M Salgaocar the dumping of ore rejects outside the lease area are mainly due to the small size of leases. He said that "Goa being a Portugese colony, had its mineral rights vested under the 1906 Portugese decree. The leases that were allotted were small, about 100 hectares only. This left the miners with little room to store the dumps."
The ministry of mines appointed the Shah Commission to investigate allegations of rampant illegal mining in Goa, after reports that unregulated mining had adversely impacted the ecology and caused large losses to the state due to evasion of royalty. The Shah Commission has already completed its investigation in Goa and is scheduled to come out with its report in December.
Iron ore mining in Goa is more than 50 years old, but has attracted illegal operators after a sharp demand in China more than doubled price of the mineral in three years. Led by Sesa Goa, a small group of miners, Fomento Resources, V M Salgaocar and Chowgule account for 75 to 80% of overall sales.
The recent surge in demand from China has now made the dumps economically viable. While Goa's low quality ore which averages about 55 ferrous content is largely exported to China, rising prices and a reduction of threshold from 55 Fe to 45 Fe, has made the dumps an attractive option to export.
(Sourced from ET)
