Mine responsibly

By lifting a one-and-a-half-year-long ban on iron ore mining in Goa and setting an annual production cap of 20 million tonnes (mt), the Supreme Court has acknowledged the need to allow mineral-rich States to exploit their deposits in an equitable and environmentally sustainable manner. Goa’s mining industry supports around 1.5 lakh people, apart from contributing valuable revenue to the State. Its people have the right to benefit from the State’s abundant mineral deposits as much as they do from its verdant beaches. The same applies to Karnataka, where the apex court had imposed a blanket prohibition on mining in July 2011, before partially revoking it last April by fixing a 30 mt annual quantitative ceiling.

The real issue is these cases — as well as in Orissa and Jharkhand — is not about mining, but of illegal and unregulated mineral extraction that is a product of crony capitalism. This aspect was well captured by the Supreme Court-appointed Central Empowered Committee, which showed how nearly 195 mt of iron ore originating from Goa got exported between 2006-07 and 2010-11, as official production of 155 mt during this period. The gap of 40 mt clearly represented illegally mined ore, on which the State did not earn any royalty. Such illicit extraction, some of it from areas in or on the fringes of national parks and wildlife sanctuaries, would not have been possible without collusion between powerful mine-lords and venal politicians/officials. Now that the worst is over, it is tempting to see the Supreme Court’s clampdown as a necessary interregnum to clean up the manner in which the mining industry operates. But the impact of the ban has been severe. In 2009-10, India’s iron ore output amounted to over 213 mt, of which 101.5 mt was exported and earned $6 billion-plus in foreign exchange. Three years later, production dipped to 136 mt and exports to 18.1 mt, worth a mere $1.7 billion. Unfortunately, this happened just when the country’s current account deficit was spiralling out of control.

Now that the Supreme Court has permitted partial resumption of mining activity in both Goa and Karnataka, it is for the Centre and State Governments to put in systems for transparent allocation and working of leases. The objective should be to ensure every tonne of ore is accounted for, along with strict enforcement of plans for reclamation and rehabilitation of land that has been mined. Once these systems are in place, it will not be difficult to reconcile the imperatives of economic growth with concerns about the ecology. Currently, the environment isn’t too favourable for iron ore exports; also, domestic steelmakers are battling a demand slowdown. But when the next boom comes, hopefully we will have been rid of the unregulated operations of politically-connected mine-lords as well as Court-imposed production ceilings.

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