The initial euphoria following the Supreme Court’s lifting of the 19-month-old mining ban in Goa has given way to confusion and anger among miners in the state. While it might take up to a year for the modalities to be worked out and for mining to resume in the state, the SC has handed a great opportunity in the hands of the central and state governments to clean up the industry.
The apex court has rendered all mining leases that expired in 2007, and were continuing till now in “deemed extended” status, as illegal. Miners are also not pleased that the court has capped annual production at 20 million tonnes per annum, less than half of the 2007 level. More than 100 mining leases were operational in Goa, which was the biggest exporter of iron ore in India. At present, the country’s largest private miner, Sesa Goa, doesn’t have any lease in Goa.
The state government, headed by BJP leader Manohar Parrikar, has to now formulate a policy of allocating mines. Parrikar has noted that “we have to grant new mining leases in the state and we will follow a clear-cut, transparent method”.
He has ruled out the until-now favourite route of first-come-first-serve for giving away the leases. A transparent norm on lease allocation will not only help weed out corruption but also help re-start the industry and allow India to bridge its current account deficit.
What Parrikar does will have implications in other major mining states like Karnataka and Odisha where the industry has suffered due to corruption and bureaucratic delays.
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(This story appears in the 16 May, 2014 issue of Forbes India. To visit our Archives, click here.)