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Goa may resume iron ore mining in two months as govt lifts ban

Sesa and other companies in Goa, however, are unlikely to be able to make any significant export as low world prices have made low-quality ore from India uncompetitive.

(Photo: Reuters) (Photo: Reuters)

Iron ore mining in Goa could begin in a period of two months after the Ministry of Environment lifted a ban, which was in place since 2012 as part of a crackdown on illegal mining, a state official and a company source said.

Shares of Sesa Sterlite, the biggest iron ore miner in Goa, rose as much as 5 per cent on Wednesday after Environment Minister Prakash Javadekar said on Tuesday he had lifted an "abeyance" on mines in the state.

Sesa and other companies in Goa, however, are unlikely to be able to make any significant export as low world prices have made low-quality ore from the country uncompetitive.

"The duty is a major hindrance," Parag Nagarshekar, deputy director of the state's directorate of mines and geology told Reuters. He added, "The state government is following up with the centre."

Goa, which is the country's biggest exporting state, is pushing for a cut in the 30 per cent export duty for its low-iron-content ore that is not widely consumed by home-grown steel companies, Nagarshekar said. China was once the biggest buyer of Goa's iron ore.

The federal mines ministry had recommended lowering the duty for Goa but Finance Minister Arun Jaitley maintained the level in his Budget for the coming 2015-16 financial year starting April 1.

Goa-based companies, nevertheless, welcomed the restarting of the environmental clearance process so that they could finally start their mines after a shutdown of more than two years.

"We still need to submit a mining plan and get a pollution control certificate," said a Goa-based official of a top iron ore company. "But at least things are moving in the right direction. We are now waiting for the fine print."

The Supreme Court in 2014 gave its go-ahead to resume mining in the state, subject to companies getting environmental clearances, but capped total production at 20 million tonnes a year, less than half peak output.

Similar curbs in other states have made the country a net importer of iron ore after being the third largest exporter a few years ago.

(Reuters)