PANJIM: Auctioning of iron ore mining leases, as prescribed by the Mines and Minerals Development Regulation (MMDR) Act, to ensure hassle free functioning of the industry could throw open the gates to new entrants in the business.
With local miners losing faith in the system and no longer able to operate after the two Supreme Court judgments, the conditions are ideal for new entrants in the industry, especially those who can bid the highest and undertake mining in a proper sustainable manner with the assurance to absorb locals.
“We will explore all the options, including auction of leases, to ensure mining activities resume in the State,” Chief Minister Manohar Parrikar had told media persons immediately after the Supreme Court judgment on February 7.
At a meeting with MLAs from the mining belt, Parrikar expressed his opinion in favour of an auction and had the backing of Additional Solicitor General of India, Atmaram Nadkarni, who said there is no other option for the government than auctioning the leases.
According to industry experts, given the precedent of the coal block de-allocation order, there is little the State can do to avoid implementation of the latest Supreme Court order, which has directed that leases be granted as per the MMDR Act.
For decades, Goan companies Dempo, Salgaocar, Timblo, Chowgule, besides Sesa Goa, have held sway in the mining sector. However, auction would mean the Goan companies having to compete with the big guns in the industry, even the likes of Jindal and Adani.
“We cannot stop outside players from bidding during the auction. Whether it is outside or local mining firm, whoever bids the highest will get the lease. Government is looking for maximum revenue,” MGP MLA Deepak Pawaskar, who comes from the mining-rich taluka of Sanvordem, said.
Goa Foundation Director Dr Claude Alvares too said that in an auction, there is no question of new or existing players. “The law says that if you want to grant leases to private players then it has to be through auction. Maximum revenue generation is the ultimate aim,” he said.
Mining is often considered a relatively straightforward business, with integrated value chains and strong control over many of the variables of production. Or is it? Many mining companies have a deeply ingrained, conventional view of their sector and the environment in which they operate. But while it served them in the past, it’s less likely to work in the future.
“The government’s intentions are very clear that it wants to bring in new outside players into Goa mining, which is very dangerous,” mine owner Harish Melvani said. “We can see what is happening at MPT. How the coal berth has caused disaster. The same scenario will be seen across Goa soon,” he added.
The industry players claim that big companies may not be interested in Goan mines as the quality of ore is low grade, which has no market internationally and it can’t be consumed locally too.
