Revenue losses increase with Goa iron-ore mine closures: FIMI

The closure of 88 iron-ore mines in the western Indian coastal province of Goa since March 2018 has resulted in a revenue loss of $832-million a year, according to a study by Federation of Indian Mineral Industries (FIMI). 

According to FIMI, the closure of the mines for the past one-and-half years has resulted in more than 100 000 direct job losses and about 300 000 mining dependants engaged in related services, such as truck owners, drivers, repair shops, petrol/diesel vendors, hotels, private lenders and shop owners, shutting down their small businesses.

The mine closure has “caused irreparable damage to Goa’s economy and many people who had opted for loans for the purchase of trucks, barges are unable to repay their liabilities with lending institutions”, FIMI said in its report.

Citing data from Indian Bureau of Mines, FIMI said that Goa’s iron-ore production in 2009/10 was 38.14-million tonnes, 35.56-million tonnes in 2011/12, 33.64-million tonnes in 2012/13 and 10.90-million tonnes in 2012/13.

There was no production of iron-ore in the coastal state the following two financial years, as a temporary ban was imposed on the mines for violations of environmental laws. However, when operations resumed subsequently, mines in the state produced 1.80-million tonnes in 2016/17 and 8.93-million tonnes in the following fiscal.

A fresh clampdown on Goa iron-ore mines came in early 2018 when the Supreme Court ruled that the renewal of mining leases for these 88 mines by the state government without holding auctions had been illegal and it directed the closure of all mining operations effective from March 15, 2018.

Since then, despite repeated assurances from the state and federal government that mining operations would be back on the rails soon, resolutions to legally circumvent the apex court ruling have proved to be elusive with the industry alleging a lack of political will at the state and federal level.

By stopping these mines, it is believed that the debt of Goa has gone up from a $1-billion dollars to $5-billion.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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