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Construction : Web Exclusive | April 2014 | Source : Construction Update

Mining In Goa On The Go

By Shriyal Sethumadhavan

After nearly 18 months, the mining veto in Goa is finally seen to be meeting the finishing line. The Supreme Court on Monday sanctioned resumption of mining with an annual cap of 20 million tonne of iron ore extraction in the state. “This is a positive development for the Indian iron ore mining and associated industries,” agrees Manoj Bothra, Vice President, M&A-Metals & Mining, Ernst & Young, as he points out to industries including steel, mining equipment, transportation, financial institutions, etc.

Mining accounts for nearly a fourth of Goa’s GDP and around 70,000 people are directly dependent on it. What’s more, this movement witnessed India’s iron ore exporter giant Sesa Sterlite to be hugely benefitted by this move. Its stock surged 9.2 per cent to Rs 202 on the BSE on Monday.

Welcoming Supreme Court’s decision, RK Sharma, Secretary-General, Federation of Indian Mineral Industries, reportedly said, “It will help put Goa’s industry back on track. The economy had come to a standstill due to the ban. The resumption may not be immediate but gradually it will start looking up.” On similar lines, Bothra maintains, “Even though we do not expect mining activity to commence immediately, the verdict should build investor confidence in the Indian mining and steel sector. Clarity in government policy and streamlining of the approvals process for restarting mining would be critical.”Also, considering that most of Goa's ore is export oriented, he adds, “…it may not be easy to get back the market share, especially in a weak global steel industry scenario.”

However, while the final capacity that will be allowed to be mined in the state will be decided by an expert panel within the next six months, the following approach needs to be on the go:
  • Iron ore extraction limited to 20 million tonne a year.
  • Resumption of mining activities conditional on issuances of fresh leases.
  • Supreme Court defines 1 km buffer zones around national parks and sanctuaries as no-mining areas.
  • Workers on rolls for all mining firms will be paid 50 per cent of the wage during the period for which they were out of work due to the Supreme Court stay order.
This decision indeed offers a ray of hope to everyone affected by the shutting down of mining and for Goa, a reason to celebrate!
 
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