PANJIM: Falling prices of low-grade iron ore in the international market, coupled with high taxation, could delay the resumption of the mining season in Goa, with industry players predicting it to be a grim season.
Besides, the south-west monsoons are yet to withdraw from the State, which has also halted fresh ore extraction activities.
The mining industry began its normal temporary break from June 1 for the monsoon, with Directorate of Mines and Geology (DMG) placing a ban on fresh extraction and transportation activities. The new season was supposed to commence from October 1, but is yet to kick off.
DMG Director Prasanna Acharya confirmed that the mining season is yet to commence. “The rains are yet to withdraw. The season starts post the monsoon,” he told Herald.
DMG records state that from October 2016 to February 2017, in all 41 mining leases were in operation and the royalty earned was around Rs 300 crore.
“Falling international prices on low grade ore and high taxation is a huge concern. With these uncertainties, it appears that there will be a delay in the season. The situation is rather grim,” Goa Mineral Ore Exporters Association (GMOEA) secretary Glen Kalavampara confirmed.
Ore prices which were $94.5 per tonne till February have dropped to $45-$50 per tonne. As such the market for low grade ore is getting tough, as most steel mills are focusing on higher grades to increase productivity.
Further, Goa’s largest market China has been captured by other low grade producing countries like Australia and Brazil.
Mine owner Harish Melvani said the price of low grade iron ore is on the decline. “For 58% Fe content with 1.50% alumina and 2.50% silica it is around $45-$50 per tonne landed in China,” he explained.
Melvani said a mine owner has to shell out 40 percent of his earning per tonne in the form of taxation like export duty, payment of royalty, contribution to district mineral fund, Goa iron ore permanent fund, cost of mining, cess, and as such the profit margin is very slim and the business is not viable at all. “Those who can afford to face losses will go for production this season,” he commented.
Further, Goa State Pollution Control Board (GSPCB) is yet to grant consent to operate under the Air and Water Acts to 19 mining leases including seven from Sonshi, which were facing suspension due to pollution. “The Board has taken the decision to grant them the consent. The same will be issued shortly,” Board official said.
