In a major relief to India’s steel industry in general and Goan iron ore mine owners in particular, the government of Goa has decided to grant leases to iron ore mines in phased manner as per the recent order by the Supreme Court thrusting such power to the state government.

“For granting licence, however, the government has trifurcated the existing leaseholders. Those mining lease holders who have paid stamp duty, in which there are no violations found in terms of Justice MB Shah inquiry/Public Accounts Committee Report, shall be considered for renewal in the first phase”, Goa chief minister Manohar Parrikar said in a note on Wednesday.

At the time of iron ore mining ban in 2012, there were 105 mines with environment clearances of which 97 mines were operational. Iron ore mined in Goa to the tune of around 90 million tonnes before the ban was largely exported to China.

But, considering that domestic steel mills like JSW faces huge shortage of ore and imports bulk quantity from overseas, opening of Goan mines will provide a relief to them.

The chief minister, however, has clarified that grant of leases will be only after compliance with all provisions, including the requirement of the report of the Indian Bureau of Mines; and after in each case the State Government has come to the conclusion that it is in the interest of mineral development that there is a need to renew the mining lease.

Such mining companies which have already been issued show cause notices, or a hearing is in progress for various violations and upon the decision thereof by the state government, will be considered and given time for payment of stamp duty and other charges leviable and payable in accordance with the conditions imposed by the state government.

The government shall also consider imposing charges prospectively and retrospectively as regards recovery etc., in addition to the royalty, including creation and payment of 10% of the sale proceeds to Goa Mineral Permanent fund. The government may reject the applications for second renewal for those mines that have found guilty of violating mining guidelines in any form.

The Supreme Court recently had directed the state government to decide as a matter of policy, in what manner mining leases are to be granted in the future.

The first lease permission for mining iron ore expired in 2007. But a number of mines that had applied for second renewal, continued operations in absence of lease renewal due to the delay in decisions by the state government in 2007.

As a result, the then state government allowed the working of the mines from 2007 till 2012, based on deemed extension basis without actually dealing with the renewal applications which were filed by the mining lease holders well within time. Non –disposal by the then state government cannot be attributed to be the fault of the lease holders.

The supreme court has in its judgment and order dated April 21, 2014 clearly held that the action of allowing the mines to be run on deemed extension basis from the years 2007 to 2012 was completely illegal and has further declared that the so – called deemed mining leases in Goa have expired in the year 2007.

Parrikar said that stoppage of the mining operations has a cascading effect of a vicious nature. Not only those who are directly involved in mining such as the mining companies but also allied activities have all suffered.

Further, exposure of financial institutions Including banks is more than Rs 850 crore as loan/ advance on mining sector to trucks, barges, mining machinery etc. to small time operator besides which advances of housing / consumer loan and other mining companies exceeds Rs 1,000 crore.

Business Standard

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