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Home / Politics / Policy /  No mining in Goa until panels’ findings ‘adequately dealt with’

New Delhi/Mumbai: The Goa government on Friday said it will not permit resumption of mining in the state until the findings in the public accounts committee and in the report of Justice Shah Commission are “adequately dealt with."

While the public accounts committee submitted its report in 2011, parts of the Shah Commission report on illegal mining were tabled in 2013. The full report has not been tabled in Parliament yet.

The Goa government, in an updated memorandum of action taken report on the Shah Commission findings, also said it will “cancel all (mining) leases that have not been operational for the last two years".

In addition, the state government will undertake a detailed audit of all working leases by engaging chartered accountants and geological experts to assess any over-extraction and will take action on the basis of that report.

Mining in Goa was suspended in late 2012 by the Supreme Court under an environment and illegal mining case that continues to be heard. Analysts have said neighbouring Karnataka, where mining remained suspended for two years and was then reopened in a restrained manner in April last year, could set a precedent for Goa.

Goa has almost 100 iron ore mines that mostly produce low grade fines (powdery iron ore) that have a market in China, where steel mills have the technology to blend Goan fines with high grade ores from Brazil or Australia to create a perfect blend of the raw material. In financial year 2010-11, Goa exported most of the 47 million tonnes (mt) of iron ore it produced, according to data from the Federation of Indian Mineral Industries.

The erstwhile Vedanta Resources Plc. unit Sesa Goa, that now forms part of Sesa Sterlite Ltd, was India’s largest exporter of iron ore until exports were disrupted when Goa and Karnataka imposed bans on mining.

The state’s big environmental hazard is an estimated 750mt of dump or topsoil from the mines, which lies all across the state in massive mounds. The industry has asked for selling of these dumps, some decades old, as China has appetite for the iron-rich soil.

Goa has also decided “to ban all dump handling until a policy is finalized". A draft mining policy (major minerals) 2012 has been introduced in the state legislature. The state has ordered for the identification of these dumps, ascertaining their ownership, assessing the quantity of the material lying there and registering them.

The Union ministry of mines has instructed the Goa government to enforce appropriate environment and other clearances as a pre-requisite for removal of the dumps.

Investors are watching the recommendations made by the Shah Commission for its bearing on the metal and mining stocks and will especially track the Odisha report that is still under wraps and slated to be presented in Parliament, an analyst at a brokerage said.

Alternatively, a petition in the Supreme Court asking for the Shah Commission reports to be made public could also determine the fate of almost all the steel and mining companies that will see if there is any threat to their domestic iron ore supply.

“The government sets up a commission for anything that becomes politicized and that stalls the progress of the industry, as in this case," said Alok Agarwal, head of research-institutional equities at Networth Stock Broking Ltd. “Until the issues highlighted by Shah Commission are sorted and out of the way, metal and mining stocks will continue to languish and I don’t see this happening before the elections."

The national election is due by May.

The S&P BSE Metal index closed at 9,292.87 points on Friday, up 2.66% from the previous day and down 9.26% from a year ago. The Sensex closed at 20,376.56 points, up 0.32% from the previous day and up 4.07% from a year ago.

India’s largest iron ore miner, state-run NMDC Ltd, closed at 144.95 a share on BSE, 1.22% up from the previous close and down 3.37% from a year ago. Sesa Sterlite, the newly restructured and merged company of London-listed Vedanta Resources closed at 189.95, up 3.66% from the previous close and up 9.07% from a year ago.

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