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Goa mining ban lifted, Supreme Court allows annual cap of 20 mn tonnes of iron ore excavation

Supreme Court says there will be no grant of lease for mining around one km of parks, sanctuaries.

Ministry of Environment and Forests to identify eco-sensitive areas around national parks within six months: Supreme Court (Reuters) Ministry of Environment and Forests to identify eco-sensitive areas around national parks within six months: Supreme Court (Reuters)

The Supreme Court today allowed an annual cap of 20 million tonnes of iron ore to be extracted in Goa which was banned by it in the state for nearly one-and-a-half years.

A bench comprising justices A K Patnaik, S S Nijjar and F M I Kalifulla, however, said expert panel will give final a recommendation on annual cap on excavation of iron ore within six months.

It said there cannot be a deemed renewal of lease after 2007 of the existing lease deeds emanating from 1962 onwards.

It also said there will be no grant of lease for mining around one km of national parks and wild life sanctuaries.

The court directed the Ministry of Environment and Forests (MoEF) to identify eco-sensitive areas around national parks within six months.

It said the Goa government will formulate a scheme within six months for utilising the funds generated by e-auction.

The bench said that the workers on rolls of all mining firms will be paid 50 per cent of the wage during the period for which they were out of work because of the apex court stay on the mining activity.

Further, within six months, the expert panel will recommend how the extracted dumps are to be utilised, it said.

The bench had on March 27 reserved its order on putting the annual cap on volume of iron ore to be extracted in Goa.

The bench had said it cannot go into the policy matter and will only address the regulatory aspect involved in it.

The expert panel had recommended to Goa government to form a mining corporation or a public sector company in view of “illegalities” by private miners.

Senior advocate Harish Salve, assisting the court as amicus curiae in the case, had read out portions of the expert panel report that was submitted in the apex court on March 26.

To a question about what will happen to the money received from e-auction of iron ore if it decides to cancel mining licences in Goa, Salve had suggested that the money should go to the state government after giving a “normative cost” of mining to miners.

The expert panel, appointed by the Supreme Court, had recommended that for the time being, iron ore mining of up to 20 million tonnes annually be allowed in Goa.

The report had suggested it was not “desirable” to start fresh extraction of iron ore.

The panel had said there is a “large-scale degradation” of eco-system in Goa by mining and the restoration needs timely monitoring and recommended creating a “permanent fund” for the purpose.

On e-auction of iron ore till now, the committee had said about 1.62 million tonnes of iron ore had been auctioned in two rounds till now and approximately Rs 260 crore realised from it.

The apex court had on November 11, 2013 allowed e-auctioning of nearly 11.48 million tonnes of extracted iron ore lying unused in Goa for over a year after it halted mining operations in 90 mines there.

The court, which had on October 5 last year stopped mining, transportation and export of iron ore in Goa following a report of irregularities by the Justice M B Shah Commission, also ordered setting up of another six-member panel asking it to file its report by February 15, 2014, suggesting the annual cap on the volume of iron ore to be extracted.

The six-member panel has one representative each from the MoEF and the Department of Mining besides “an ecologoist, a geologist, a mineralogist and an expert on forest.”

HIGHLIGHTS

* Ban imposed in 2012 to curb illegal mining

* Panel recommends resuming output with cap of 20 mln a year

* Resumption of Goa mining to put more pressure on global prices

Parrikar welcomes SC decision to allow mining in Goa

Goa Chief Minister Manohar Parrikar today welcomed the Supreme Court decision to allow mining in the coastal state which was on hold since October 2012.

“I am yet to see the entire order (of SC) but what I have learnt from primary reports is that we are allowed to mine up to 20 MT (million tonne). I welcome the Supreme Court decision, which has agreed with our main plea to restart the mining activity,” Parrikar, who is in Aurangabad in Maharashtra for poll campaign, told PTI over phone.

The Supreme Court today allowed an annual cap of 20 million tonnes of iron ore to be extracted in Goa.

Parrikar said the result was the outcome of the “strong case” put up by the state government before the apex court.

A state-based NGO Goa Foundation had approached the apex court against illegal mining after central government-appointed Justice M B Shah Commission submitted a report claiming a massive mining scam to the tune of Rs 35,000 crore in the state.

“Though I have not seen the entire SC order yet, the state government should be given responsibility to put check and balances on the mining industry,” he said, adding the closure of mining activity resulted into 25 per cent slide in the state revenue.

Lifting of Goa mining ban to bring life back to industry: FIMI The lifting of an 18-month ban on mining in Goa will help revive economic activity in the coastal state, the Federation of Indian Mineral Industries (FIMI) said.

“It is a very good thing to happen. This will bring the mining industry back in Goa. It will create employment and boost the economic activity,” FIMI Secretary General R K Sharma said after a judgement today by the Supreme Court.

The apex court today partially lifted the mining ban in the state and allowed 20 million tonnes of iron ore to be extracted annually. Production in Goa before the ban was about 45 million tonnes a year.

The court had banned operations in all 90 mines in Goa from September 2012 after the Justice M B Shah Commission pointed out illegalities in the industry.

“The mining industry in Goa will breathe into life again. Port activities in the state, which were also suffering due to the ban, would again come back into life,” Sharma said.

The ban on production of iron ore in Goa and Karnataka had hit India’s exports of the key steel-making ingredient.

The country, the third-largest iron ore exporter in the world in the not so distant past, exported 12.57 million tonnes during the April-February period of 2013-14 against 17.35 million tonnes in the same period of the previous financial year.

India used to export more than 100 million tonnes of the ore a year, mainly to China, before the ban was imposed.

India lifts iron ore mining ban in Goa, caps annual output

(Reuters) India’s Supreme Court lifted a 19-month old ban on mining in Goa, its top iron ore-exporting state, on Monday, a move that will put more pressure on global prices although it capped annual output in the state at 20 million tonnes.

The additional supply from Goa, which exports nearly all of its output, would add to an expected surplus of iron ore this year as big mining companies such as Rio Tinto and BHP Billiton boost production while demand from top consumer China slows.

The ban was imposed in 2012 as part of a drive to curb illegal mining in Goa. It was lifted on the recommendation of a panel appointed by the Supreme Court to look into the mining industry and the panel suggested capping production at 20 million tonnes to protect against illegal activity.

Shares of Sesa Sterlite, India’s largest private iron ore miner, surged more than 7 percent on news that the ban had been lifted.

“In itself 20 million tonnes is not a huge amount, but it’s just another contributor to rising supply,” said Graeme Train, commodity analyst at Macquarie in Shanghai.

The question to ask, said Train, may be whether Chinese steel mills would be willing to take on the low-grade iron ore from Goa given Chinese producers’ growing preference for higher quality material, in step with Beijing’s anti-pollution campaign.

“Chinese mills are looking for more high-grade material and the discount for low-grade material is starting to open up so it’d be interesting to see if they (India) can actually get 20 million tonnes into the market,” he said.

At around $117 a tonne currently, iron ore prices <.IO62-CNI=SI> have fallen more than 13 percent this year as a slowing Chinese economy curbs its demand for the steelmaking raw material.

Morgan Stanley sees global seaborne iron ore supply exceeding demand by 79 million tonnes this year, with the surplus doubling to 158 million tonnes in 2015.

A panel appointed by India’s Supreme Court earlier recommended the 20-million-tonne production cap. The court earlier allowed the sale of about 15 million tonnes of iron ore that had sat in a stockpile.

That iron ore that was auctioned is being exported, said Prasanna Acharya, director for the directorate of Mines and Geology.

“Exports will continue. As soon as the new ore comes it will get exported,” he said.

A ban on production and exports in Goa imposed in September 2012, coupled with similar curbs enforced earlier in neighbouring Karnataka, have sliced India’s iron ore exports by 85 percent, or 100 million tonnes, over the past two years.

India was once the third-largest exporter of iron ore, but has now slipped to No. 10.

While analysts expect a gradual recovery in Indian iron ore exports over the next two years, the pace is likely to be modest and far from a record high of more than 117 million tonnes set in the fiscal year through March 2010.

“The 20 million tonnes is a reasonable quantity to start with. Fresh mining will start after the monsoon and exports of (iron ore) fines may start in September,” said Basant Poddar, vice-president of the Federation of Indian Mineral Industries.

The monsoon season runs from June to September.

The top court also asked the Goa state government to create an expert panel and submit a report regarding capping of output and other issues within six months, a three-judge bench headed by justice A.K. Patnaik said.

 

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