Source –\u00a0ft.com<\/p>\n
Forty kilometres inland from the south Goa beaches beloved of European backpackers, lies the Codli iron ore mine: two yawning grey-ochre pits that were, until recently, among India\u2019s most lucrative mineral resources. But now the mine \u2014 controlled by London-listed\u00a0Vedanta Resources \u2014 has the feel of a site being reclaimed by nature. Birdsong floats over the deserted frame of a plant that once treated 15,000 tonnes of ore each day, while Volvo diggers sit in the mine\u2019s central compound.<\/p>\n
Codli is the biggest of several dozen Goa iron ore mines that halted production in March after India\u2019s supreme court ordered an industry shutdown in the state. The judges accused Goa\u2019s government of \u201cpatently illegal\u201d behaviour in its renewal of mining leases three years before \u2014 issued for token payments from miners who had repeatedly broken environmental regulations.<\/p>\n
The upheaval in Goa is the latest in a string of controversies that highlight a key tension surrounding the country\u2019s economic development: how to remain a fast-growing main market while protecting the environment and enforcing the rule of law. Goa is India\u2019s smallest state but its richest in terms of per capita output. As well as its outsized tourism industry, it holds vast iron ore reserves that yield the bulk of national exports of the mineral.<\/p>\n
But, as elsewhere in India, the state\u2019s mining industry has come under heavy fire, with complaints that it has exploited political connections to flout laws while damaging the health and livelihoods of local farming communities. That has prompted swingeing official action against the sector, prompting debate over whether such moves are in India\u2019s broader economic interest.<\/p>\n
The supreme court\u2019s bombshell decision this year was the latest chapter in a legal saga that has gripped Goa for nearly a decade. After activists\u2019 complained about illegal mining practices, the government in 2010 commissioned retired judge MB Shah to investigate the claims.<\/p>\n
His report two years later sparked outrage, with allegations of systematic illegality in Goa\u2019s mining sector as companies were accused of operating without valid licences and ignoring environmental laws. That prompted the supreme court\u2019s first ban on mining in the state, which lasted until 2014.<\/p>\n
The resumption of mining was a relief to thousands of mining workers, and many more in auxiliary industries, such as trucking and barging. This year\u2019s renewed suspension, however, has dashed hopes that Goa could restore its reputation as a reliable supplier to steel groups in China and Japan.<\/p>\n
\u201cWe were trying to stress to the market that [the first suspension] was an anomaly,\u201d said Ambar Timblo, managing director of Fomento Resources, the state\u2019s second-biggest miner after Vedanta-owned Sesa Goa. \u201cAnd just when we were getting back the credibility in the market, it\u2019s shut down again.\u201d<\/p>\n
In its most recent judgment, however, the supreme court homed in on what critics say has been a longstanding problem in India\u2019s primary industries: government officials giving mining rights for minimal payment to well-connected tycoons, costing billions to the public.<\/p>\n
In Goa, \u201canyone who was powerful was essentially co-opted\u201d, said Rahul Basu, research director at the Goa Foundation, an activist group whose lawsuit triggered the apex court\u2019s latest ruling. \u201cThe classic way of doing this was to say: you buy a truck and we’ll guarantee you business at a ridiculous rate.\u201d<\/p>\n
While it cited no specific evidence of corruption, the supreme court found that Goa\u2019s government had raced to renew mining leases at minimal cost in the days before the 2015 introduction of a national law that would have forced it to hold competitive auctions for such leases.<\/p>\n
\u201cThe state sacrificed maximising revenue for no apparent positive reason, virtually surrendering itself to the commercial and profit making motives of private entrepreneurs,\u201d the court wrote. \u201cThe real intention . . . was to satisfy the avariciousness of the mining lease holders.\u201d<\/p>\n
The Goa mining suspension has coincided with the shutdown of India\u2019s largest copper smelter in southern Tamil Nadu state, also owned by Vedanta, after police killed 13 people protesting against its pollution record. The supreme court had previously plunged India\u2019s coal industry into crisis in 2014, by cancelling more than 200 coal mining licences mostly issued without payment.<\/p>\n
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