There were smiles all around when Chief Minister Laxmikant Parsekar flagged off the first shipment of iron ore to leave the Goan shores after the ‘official resumption of mining activities’ in Goa this month. Following a closure of mining activities for three years, Vedanta exported 88,000 tonnes of low grade iron ore to China since resuming mining operations at its Codli, Bicholim and Surla mines last month. The consignment exported though consists ‘mostly of’ iron ore that has been purchased by the company in the e-auctions conducted by the Mines department of the Goa government. The e-auctioned ore was from the mounds of low grade ore that has been lying in jetties and other areas of the State for the past three years.
While this shipment may give hope to the thousands of people across the State, who are either directly or indirectly dependent on the mining industry for their livelihood, there is nothing much to cheer about yet. Vedanta is the only company to have announced resumption of mining operations and to actually start some operations. Other companies have announced that they would be restarting their activities in mining but are yet to commence any operations. Besides, the ore that left Goan shores on Monday was not freshly extracted ore, but ore that the Supreme Court of India has specifically ordered to be disposed off before extraction of fresh ore could restart in the State. Much of the iron ore that was identified for e-auction still remains to be sold and until all that ore is purchased by buyers, fresh extraction will not be permitted in Goa.
There have not been many takers for the iron ore that is being e-auctioned by the government. The Mines department has identified 15 million tonnes of iron ore for e-auction. Of these 15 million tonnes, in 13 e-auctions, since February last year, it has managed to sell just 7.7 milliion tonnes, which amounts to 50 percent of the total quantity of ore that has been identified for e-auction. Of this, besides the 88,000 tonnes exported on Monday, about 12.20 lakh tonnes had been exported. These statistics are indicative of just how Goan ore is not enticing the international market any longer, which is a major cause for worry as the low grade iron ore from Goa, with a ferrous content of 58 Fe, is not used by Indian steel manufactures. As a result, all the ore from Goa has to be marketed outside the country and the falling international prices of ore do not provide hope for a dramatic increase in sales.
Though on Monday the chief minister and Vedanta officials expressed their confidence in resumption of all activities of the mining industry, and of production taking off in the coming months, there are various issues related to mining in Goa that need to be tackled before the industry can step up production. The chief minister mentioned some, including taxation and dumping of rejects outside the lease area and the cap on extraction. What was not mentioned was the writ petition that was filed in the Supreme Court last month challenging the renewals of 88 iron ore mining leases which Goa Foundation, that has filed the petition, alleges resulted in a loss of Rs 80,000 crore to State exchequer.
Monday’s export of iron ore – to Goa’s largest market China – may give the government the opportunity to claim that they have kept their promise of resuming mining operations in October. But this is merely a symbolic start, for the digging into the ground for ore has not commenced and until that happen all claims of resuming operations will be merely superficial operations. It is only when the heavy mining machinery begins digging into the earth that the tipper trucks will be back on the roads and the barges will begin floating down the rivers. There is still a long way to go before any of that happens.
