In an interview with Jharna Majumdar of Mydigitalfc.com, FIMI’s Mr RK Sharma said that the revival of the mining industry is still likely to face many hurdles even though SC decision to lift mining ban in Goa is a step in the right direction.

Excerpts:

Q - What is your view on mining ban being lifted in Goa and what are the challenges the mining companies will have to go through for resuming mining?

A - Although technically the Supreme Court has lifted the ban on mining in Goa, it will take at least two years before the mining actually begins. Most of the mining leases were working under deemed extension clause of Rule 24A(6) and 24A(8) & (9). Supreme Court has held that in so far as the first renewal is concerned, the clause of deemed extension as provided in the rules can be valid but the same deemed extension clause cannot be valid for the second and subsequent renewals for the simple reason that under section 8(3) of the MMDR Act, 1957, the second renewal has to be in the interest of mineral development and the same has to be certified by Indian Bureau of Mines (IBM). Most of the leases in Goa are under second renewals and the term of first renewal has ended on November 21, 2007. Any production thereafter is illegal.

Q - What are the overall difficulties faced by the mining industry? Your suggestions to overcome them?

A - None of the state governments are willing to accept the difficulties faced by the mining industry. The main difficulty is the delay in granting and renewal of mining leases under the MMDR Act, 1957, environment clearance under Environment (Protection) Act, 1986 and forest clearance under Forest (Conservation) Act, 1980. These delays are further compounded by the casual attitude and corruption in the state governments. Unless the question of delay and corruption is tackled by the state governments, the future of mining industry is bleak.

Q - What are your expectations from the government?

A - The industry expects the government to streamline processes, cut delays and remove corruption.

Q - How do you see iron ore exports in 2014-15? Do you see a revival in exports and what is the estimated quantum likely to be exported this financial year?

A - I do not see any revival in iron ore exports in 2014-15 because exports from Karnataka are banned. Goa is not likely to restart in 2014 to 2015 and on the eastern sector, 30% export duty and four times railway freight make exports unviable.

Q - With Chinese demand under stress, do you see iron ore use by domestic steel manufacturers rising?

A - Our main exports were iron ore fines which are not required by the domestic steel industry. The capacity of the domestic steel industry is limited. In fact, as iron ore fines cannot be evacuated from the mines because of exports being unviable, the domestic steel industry imports lumps or pellets.

Q - How do you see the industry’s future in the next three years?

A - We are waiting for the new government to take over before making any comments.

Q - What are the licences required to resume mining in Goa? You have mentioned that mining licences of most companies have expired. Does that mean exports will continue to be low?

A - As per Supreme Court judgment dated April 21, 2014, all the mining leases which have expired on November 21, 2007 have to apply for fresh grant under the MMDR Act, 1957, seek environment clearance under Environment (Protection) Act, 1986 and, if the lease is under forest, seek clearance under Forest (Conservation) Act, 1980. This process is likely to take between two and five years in the case of Goa whose government is more mining friendly. In other states, it would have taken seven to eight years.

Q - Do you think with mining activities starting in the country, companies may again flout rules and start illegal mining?

A - The need of the hour is to start mining as it has led to a lot of people losing their jobs. First mining should start and only then should we talk about illegal mining.