Indian Court Panel Recommends Ending Iron Ore Mining Ban in Goa

A panel set up by India’s top court recommended lifting a ban on iron ore mining in Goa, albeit with conditions that include lowering production.

Miners in the western state, which exported almost all its ore before the Supreme Court order in October 2012, should limit output to 20 million metric tons, the panel said today in a report. The quantity is about 40 percent of what the state produced in the year ended March 31, 2012. The court will consider the panel’s suggestions tomorrow.

The Goa government, acting on the counsel of a panel set up by the mines ministry to probe mining violations, imposed the ban in September 2012. The following month, the top court upheld the ban and halted transportation of ore, similar to its sanction in southern Karnataka state the previous year.

The two adjoining states at that time produced almost half of India’s output of iron ore as demand soared amid China’s economic boom. Goa, which accounted for about half of India’s iron-ore exports, lost an estimated 349.4 billion rupees ($5.8 billion) because of illegal mining, the ministry panel, headed by retired judge M.V. Shah, said in a report at the time.

Any mining activity in Goa should be “strictly monitored and regulated” by the state until a scientific study is completed, the six-member panel said in its report that was submitted to the court yesterday. This may take about 12 months, it said.

The panel suggested no new mining be allowed without adequate regulatory and technological measures to ensure restoration of the ecosystem and to minimize future damage to forests. A permanent fund should be created to safeguard “intergenerational equity and sustainability,” according to the report.

Shares of Sesa Sterlite Ltd. (SSLT), which owns the biggest iron ore mines in the state, rose 4.2 percent to 182.45 rupees at close in Mumbai. The benchmark S&P BSE Sensex rose 0.2 percent.

To contact the reporters on this story: Pratap Patnaik in New Delhi at ppatnaik2@bloomberg.net; Abhishek Shanker in Mumbai at ashanker1@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Indranil Ghosh, Abhay Singh

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