BackGoa govt releases new mining policy framework
Mining companies will have to go through inquiries and be able to get mining lease approved, policy says
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Mumbai: The state government of Goa released its mining policy framework on Wednesday that seeks to resume mining and grant mining leases after fulfilling requirements and conducting inquiries, but two prominent miners said there are several uncertainties that indicate it is unlikely the industry will start producing this fiscal year.
“The state government after having considered the matter from every possible angle, has decided to exercise its power under section 8(3) of the Mines and Mineral Regulations and Development Act, 1957, and to consider each of the cases on their own merits…" a note titled The Goa Grant of Mining Leases Policy, 2014, on the website of the directorate of mines of Goa, read.
It said the grant of leases would be “subject to compliance with the conditions which may be laid down by the state government including for strict pollution control measures," and thereafter take a decision on the renewal in terms of Section 8(3) of the MMRD Act, 1957, “complying fully with the procedure laid down therein."
Two prominent miners said they welcomed the state government’s move to take the reopening process of the mines forward; however, there are several uncertainties that mean it is unlikely to be a quick or easy process.
“The intent comes out clearly on the urgency to commence mining but exactly how, and how quickly, it is difficult to say," said Ambar Timblo, managing director of Fomento Resources, which has iron ore mines in the state.
“This is a statement of intent. But it still has a long way to go," said Shivanand V. Salgaocar, managing director of mining firm V.M. Salgaocar and Bro. Pvt. Ltd.
A two-year environment and illegal mining case was concluded in April with the Supreme Court asking the state government to put the framework and systems in place to resume mining in a controlled fashion.
The 18-page policy that was presented in the Goa legislative assembly, according to people familiar with the matter, said it would divide the mines into three categories on the severity of the violations by them, category 1 having those with none, or little violations.
The mining companies will have to go through inquiries and be able to get their mining lease approved, the policy said.
“Presently, the inquiries are in progress at various levels and foras including the investigation by the Special Investigation Team, by the Team of Chartered Accountants which have been set up by the state government and after the inquiry is complete or during the course of the inquiry where it is found that any violations have taken place, such persons shall not be considered for grant/renewal of the leases," the policy said.
The two miners said this would be a hurdle along with many others that is likely to continue the delay in reopening the mines.
The state government has yet to revoke its suspension order of 10 September, 2012 and the ministry of environment and forests at the central government also has to remove a similar ban, the miners said.
The economic conditions are not feasible to restart mines—world over, iron ore prices are falling owing to overcapacity and in India, the customs duty on exports continues to remain high at 30%.
In addition, there is a 15% royalty and a new fee demanding 10% of profits to be put into a “permanent fund" as directed by the Supreme Court.
Restart of mining “depends on the fact that we need to be living in an economically sustainable environment as well," Timblo said.
In an interview on 20 September, Tom Albanese, chief executive officer of the largest private iron ore miner, Sesa Sterlite Ltd, said Goan ores are unlikely to find a market in India owing to their low grades and therefore must be exported, but profits may not be good.
The other hurdle could be the activists who could once again challenge the Supreme Court’s and the government’s decision to reopen the mines, the companies said.
“This season is almost gone. I don’t think mining will start before September 2015," Salgaocar said.
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