Mining: Ban exports for drying up greed tap

By Cleofato A Coutinho
18 November 2012 22:01 IST

The halt to mining activity in our state ought to be used as opportunity to think of the alternatives and chart out an alternative path. Our small state which exports 55% of the country’s ore have always complained of Goa Government’s  share of revenue from the royalty to be very low. In a way Goa got very little in return for large scale destruction of its nature. In any case it was expected that there would be a steep decline in the international iron ore prices by 2014 due to the demand supply imbalance and the hype would get punctured in the immediate future. This is a god sent opportunity.

The government appointed task force for regional plan 2021 noted “mining is an industry that needs to be reviewed in the context of the long term environmental damage being caused, with comparatively limited economic benefit to the state. Therefore new opportunities need to be created to absorb those currently employed in the mining sector”. However instead of using the opportunity to search for different growth centers for the state all efforts are directed towards the start of so called “legal mining” (whatever that means).

There is no doubt that the immediate halt of mining activity is bound to create short term shock to the industry and the state economy. The task force report on Regional Plan 2021 records that mining occupies 8% of Goa’s land area and it’s  contribution is only 4.2% of the state GDP. These figures may be the pre 2008 boom as it records 10,000/- trucks and 260 barges used in the transportation of ore while the figures that are spoken about today are 22,000 trucks and 600 barges. The post 2008 boom in mining activity and the subsequent halt due to the report of Shah Commission requires a reconsideration on various aspects including a fundamental aspect of sustainability of mining and its social cost.

If we keep aside the post 2008 boom figures the task force on regional plan records that mining industry provides employment to about 11,000 persons directly and about 10,000 persons indirectly. It is certainly the responsibility of the state to rehabilitate this section and the state which has been boasting of growing  at over 10% per annum should not put its hands up due to the pressure from Bicholim, Sattari, Sanguem and Quepem.

The 1957 Mines and Minerals (Regulation and Development) Act and the Mining Concession Rules 1960 amended in the year 2000 were a result of decisions of the planning commission which were based upon demand and supply of minerals at that time. The export policy of minerals is also on the basis of the demand and supply in the international market. The indiscriminate mining and unrestrained export by the post 1991 economics driven by greed not need, took  no care of damage to environment and social costs. Minerals being a exhaustible resource a different economic approach based upon the social cost to environment is required.

It is nobody’s case that there should be no appropriate utilization of natural resources. There can be no dispute that mining activity has led to growth centers in states but the finite nature of the resources and that each generation should be using the natural resources judiciously ought to have been the basis for the mining laws and the export policy of minerals.   

The post 2008 boom, fueled by the Chinese demand for steel lead to unprecedentedly export of low grade iron ore which ore by our standards were rejects and could not be used for producing iron and steel in our country. For the past five years the private operators have amassed thousands of cores of Rupees (Shah Commission speaks of about 35 thousands crores for Goa alone!). The figure of Rs. 35,000 crores may turn out to be inflated but there can be no doubt that the private players amassed thousands of crores of Rupees. These players who amassed thousands of crores have not invested in setting up iron and steel plants which could utilize our natural resources to its optimal advantage. Coal mining blocks are allotted in a manner that coal mined is utilized for power generation. Why should the same formula not be applied for iron ore mining?

After the 2008 boom the world prices made exports of iron ore so attractive that earning foreign exchange for India and generation of employment were tomtomed as the benefits without taking note of the destruction of nature and social costs   and relatively little employment generation.

Instead of permitting export of ore, was it not possible to facilitate production of steel  by providing of incentives for setting up steel plants in the country which could utilize the ore extracted including low grade ore?  The country would lose royalty but the gain in terms of excise for the country  and VAT for the states  would certainly outweigh the losses in royalty.

The answer to the present crises may lie in taking a second look at the export policy of iron ore and facilitating setting up iron and steel plants in the country so that the exhaustible natural resource is used for the benefit of the country. Perhaps that is the way of drying the   greed tap.

Use of iron ore including low grade iron ore    for such plants, the country and the state shall travel towards need based mining instead of   export oriented mining. However that is the decision to be taken at the national level. Probably after the Shah commission presents its third report on the iron ore mining in Orissa, the country shall get alive to the need of drastically curtailing mining by permitting it for captive domestic consumption. Goa must make efforts in that direction.

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Cleofato A Coutinho

Cleofato Almeida Coutinho is a senior lawyer and one of the constitutional expert in Goa. A member of Law Commission of Goa, he also teaches at Kare College of Law in Madgao.

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Previous Comments

The solution suggested is much worse than the problem. Steel prooduction need iron ore mining as well as causes huge amount of pollution on its own including release of greenhouses gases and numerous pollutants. It also requires huge land, tremendous amount of water, import of coking coal which will all add tremendously to the pollution. It is obvious that Goan mine owners would have invested in steel making but for these limitations and the policy which rules out setting up highly polluting industries like steel making in Goa. Today, each one has an opinion and suggestions to make. However, a deep understanding of the issue at hand is missing and the solutions suggested are at the most half-baked, impractical and more often contradictory when one goes into the true related cause and effect analysis.

- Deepak, Goa | 19 th November 2012 15:14

 

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