Considering the hardship to mine labourers and their families, fall in export, starving of supplies to the domestic level, steel industry and miners are hoping for a positive reaction from the Supreme Court for Goa as well
At the close of 2013, the good news is the lifting of the ban imposed on the iron ore mines, by the Supreme Court, has brought some cheer to the iron ore-starved steel mills. Only 15 iron ore mines are in operation that can mine about 15 million tonnes; if efforts are made to speed up production of iron ore, and if there are no environmental hiccups, the maximum that can be mined would be approximately 22 million tonnes of iron ore.
Actually, the steel industry in Karnataka alone requires 36 million tonnes of iron ore. Out of the 15 million tonnes of iron ore mined in this state, National
Mineral Development Corporation (NMDC) accounts for nine million tonnes of iron ore from its mines in Karnataka.
Although the Supreme Court has lifted the ban on iron ore mining, apart from Ministry of Environment and Forest (MoEF) clearances, many mine owners require approvals of land leases. Many of these may have expired in the interim period, when the ban was effective. They have to get these clearances before mining can commence. Anyway, the lifting of the ban on iron ore mining is welcome and long overdue.
Apart from meeting domestic needs, export shipments of iron ore in 2012-13 touched a measly 18 million tonnes against 168 million tonnes shipped in 2010-11, because the Supreme Court stopped illegal mining activities, both in Karnataka and Goa. It may be recalled that between July and August 2011, iron ore mining in Karnataka was banned while a similar ban was imposed in Goa in October 2012.
India's iron ore exports, prior to this ban, was valued $7 billion. Commerce minister Anand Sharma stated, in an interview, that the trade deficit soared to $191 billion in 2012-13 and the current account deficit (CAD) to $88.2 billion, or 4.8% of the India’s gross domestic product (GDP).
While the iron ore export ban, as a result of illegal mining activity, caused a great loss in foreign exchange earnings, our coal imports cost the country a mammoth $22 billion. The coal industry needs to do a lot more to overcome the obstacles of MOEF clearances. India's largest iron ore miner, the NMDC, which accounts for 40% of the country's supplies are able to get its output from mines both in Karnataka and Chhattisgarh. This is one of the government organisations doing its mining operations quietly. India's steel manufacturers expect to increase their production by 24 million tonnes by 2017-18 from the current level. This means not only NMDC but other mines will also have to increase their production to meet their demand.
In 2012-13, iron ore production reached 140 million tonnes. Since the lifting of ban has just been announced, it would be at least 12 to 18 months before signs of increased production can be felt. Unless the Supreme Court also decides to lift the ban on mining operations in Goa, it may be necessary to import iron ore from Australia or elsewhere. In fact, Australia, the largest iron ore supplier in the world, expects to push up its exports to 670 million tonnes this year. Iron ore prices rose to $135 per (dry) tonne.
During a recent press conference, Manohar Parrikar, the Goan chief minister mentioned that, hopefully, mining operations in Goa would resume this year.
He felt, that, if and when the mining ban is lifted, it would be necessary for both Central and state governments to work out the modalities to reduce windfall profits earned by miners, and hopes that extraction of ore would be done keeping in mind the environmental concerns.
The steel industry and miners are hoping for a positive reaction from the Supreme Court, considering the hardship to mine labourers and their families, fall in export, starving of supplies to the domestic industry. Hence, the ban in
Goa should be lifted as soon possible.
(AK Ramdas has worked with the Engineering Export Promotion Council of the Ministry of Commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
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N Kanitkar
Remains to be see if the Parrikar government can prevent iron ore miners from going overboard to fill their coffers. If indiscriminate mining resumes, the government will have a major problem in its hands.
Most of the people employed directly by Goa's mining industry are migrants while the locals are engaged in ancillary industries like hiring out trucks to the mines.
Thus when mining is indiscriminate only a handful of local people benefit while everyone suffers from pollution of air, water and other natural resources.