Even as the iron-ore mining has started in Goa, it is not been felt on the ground. Before the ban, the mining capacity used to be not less than 40 million tonnes for the season. However, now it has been reduced to the cap of 20 million tonnes by the intervention of the Supreme Court, post the mining ban in September 2012.
Out of this 20 million tonnes, the Goa government has roughly allocated 15-17 million tonnes and has fixed maximum “quotas” to the mining companies in order to give a level-playing field to the mine owners. Last season, even after the lifting of the ban in mining, the activity in the mines was very minimal and there was hardly any production. This means that the Goa government lost heavily in terms of revenue as the iron ore business overall was at its lowest ebb.
Mining companies are not coming out in open to talk to media however; they are willing to talk “off the record” as they are all miffed with government’s way of allocating the quota to different mining companies. In fact, the Goa Mineral Ore Exporters’ Association (GMOEA) also did not respond to the queries made by Herald over email.
There are companies which want a larger share as they have the resources and manpower to extract more but are unable to do so as they cannot go beyond their allocated quota. The mining companies have given their representation before the government and the Goa government is likely to meet on November 8 to deliberate on this issue. The companies are also waiting eagerly when the Supreme Court hears on the recommendation of the 6-member committee that Goa is fit enough to mine about 37.5 million tonnes. The hearing is likely to come-up in the third week of November.
According to a source in the mining industry, “Goa’s pocket is virtually losing not less than 400 million dollars as same money would have been used in Goan market to give a fillip to the economy of the state. Today Goa happens to be one of the largest drawer of per capita loans. We need to see government’s intention to rev up the economy and help generate employment.”
The source based his above calculation by saying that if we consider the sale of iron ore as $ 30 per tonne, then the 20 million tonnes would cost not less than 600 million dollars. “Even if $ 20 is spent in Goa, it would mean that Goa would have received a shot in its economy arm by not less than $ 400 million, which could have helped all the stakeholders in the mining and the Goan economy too.”
There is yet another issue which the mine owners are very miffed with. Haresh L Melwani, CEO of HL Nathurmal told Herald that, “In order to develop local market, we have to sell our minerals to the downstream. For example, iron-ore can be sold to some small blast, if it a red oxide than I can sell it to some paint manufacturer. But the problem is that in November 2012, soon after the mining ban in September 2012, the Goa government in its wisdom passed a law saying that in case of a local sale to a downstream consumer, the 5 per cent VAT which is charged on that transaction will not be modvatable. So, if we are selling it locally, this effectively makes the product more costlier by 5 per cent. The Goan companies will rather buy the same product from Maharashtra or Karnataka where there is no such VAT. It seems the message given to us is to export to China and not align with ‘Make in India’. Why was this law passed when there was no trade after the ban in mining?”
He added that we have raised this issue before the government, the four MLAs from the mining areas and both the Members of Parliament. “So far there is no response on this as we have given our representation about a month back.
On the issue of quota system, Melwani was candid enough to say that, “there are leases in mining which can produce, a lease which may produce and a lease which cannot produce. We have only 20 million tonnes and the government has to maximise its revenue so the government must allocate to those who are willing and can produce. This can be done only when technical professionals, which is lacking in our mining department, can sit together and decide for the betterment of the state government revenue and the business overall.”
Advocate and prominent trade union leader, Christopher Fonseca told Herald that, “Even though the mining has stated, the intensity is not likely to touch to the level of 2010-11. There are multiple factors, including the market, structural adjustments etc. All the concerned stakeholders, which includes the Government of India and Goa along with miners and others must take the Supreme Court into confidence and go ahead with the business of mining well within the rules.”
