Indian Ministry quashes state ban on iron ore mining

MUMBAI (Scrap Monster): The Ministry of Environment, Forest and Climate Change in India has decided to revoke the ban on mining in the South Indian state of Goa. Removal of the three-year old ban will pave way to resumption of iron ore mining activities in the coastal state. According to the Ministry, the state government will now have to set limits for4 individual miners to ensure that the total mined output does not exceed the limit of 20 million tonnes set by the Supreme Court.

 

The Environment Ministry in 2012 had suspended environmental clearances for as many as 93 mining leases in the state of Goa. The decision was based on a report submitted by former Supreme Court judge highlighting several cases of illegal iron ore extraction activities in the state. The report stated that irregularities in the mining sector have led to mining scam amounting to approximately Rs 3,500 crores. The decision led to complete halt of all mining activities in Goa, resulting in huge unemployment and losses in millions to state revenues.

 

According to the Ministry, the removal of ban is in accordance with all directives issued by the Supreme Court. In April 2014, Court had revoked the ban on mining activities, but had stipulated that the mine output from the entire state does not exceed 20 million tonnes per year.

 

The state Chief Minister expects miners to resume activity at the earliest. Furthermore, he requested the Ministry to scrap the export duty on ore with low ferrous content. He also urged the Ministry to lower the export duty on ores with high ferrous content.

 

However, the industry doesn’t look upbeat, as the decision comes at a time when iron ore prices have plunged to their 12-year lows. The iron ore supply is at its peak with global mining majors boosting their output. On the other hand, demand continues to remain weak. Many companies are not operationally ready to resume operations immediately after a three-year long slumber.