MAC: Mines and Communities

India's state of Goa shuts all iron mines

Published by MAC on 2012-09-18
Source:, Reuters, Economic Times

All ninety iron ore mines in the Indian "holiday state" of Goa have been temporarily closed, following a government-backed inquiry which concluded they lacked environmental permits.

The MB Shah Commission, which took five years to complete its investigation, concluded that  illegal mining had spread over 500 hectares, "several hundred acres" of which were forest and government-owned lands.

The biggest iron ore producer in the state is London-listed Vedanta subsidiary, Sesa Goa.

For earlier story, see: Vedanta Resources holds its 2012 AGM

Indian state of Goa shuts down iron mines

Cecilia Jamasmie

12 September 2012

Of the 93 mines in the Indian state of Goa, 90 are iron ore producers and all of them have been force to halt operations after a government-backed inquiry said they were illegal and didn't have the basic environmental permits to operate.

The investigation, led by retired judge MB Shah, had cost more than $6 billion in five years, according to Hindustan Times.

Local authorities ordered all mines to fold up on Tuesday, but they said companies with suitable documentation would be allowed to restart soon.

The measure comes after the Justice MB Shah Commission report, which was tabled in parliament on Friday, said illegal mining was spread over 500 hectares, from which "several hundred acres" was forest and government-owned land.

According to the report, authorities and mining companies alike have looted natural resources and facilitated an "unrestricted, unchecked and unregulated export of iron ore to China", which made the exporters of ore "richer and richer".

Despite being the world's third exporter of iron ore, India's sector has not taken off as much as it could as iron ore producers have been rocked by illegal mining accusations.

A ban on iron ore mining was imposed in the southern state of Karnataka last year, while in Goa many licences have been cancelled.

In June a scathing report by Human Rights Watch deemed India's 2,600 mines "out of control" and pointed out "pervasive lawlessness in India's scandal-ridden mining industry" and the collapse in enforcement of laws to protect local communities.

Goa suspends all mining activities temporarily


11 September 2012

MUMBAI - India's western Goa state temporarily suspended all mining activities, effective Tuesday, after an expert panel formed by the federal government found "serious illegalities and irregularities" in mining operations, the state government said in a statement late on Monday.

Goa has not banned movement of iron ore already produced and stored at ports or in transit, the statement said. The state will form a verification and clearance committee to scrutinize operations before giving approval to resume mining, R K Verma, principal secretary at mines and geology, said in a statement.

Goa is India's second-biggest iron ore producer. It produces more than 50 million tonnes of iron ore annually and exports almost all of it, making it the top exporter. Sesa Goa Ltd , an Indian unit of London-listed Vedanta Resources Plc , gets most of its iron ore from mines based in Goa state.

The mining-suspension order came a week after the Supreme Court partially allowed mining in neighbouring Karnataka state following a ban of more than a year.

India used to be the world's No. 3 iron ore exporter, with most of its product heading to China. But a clampdown on illegal mining in 2010, and New Delhi's measures to keep output for domestic steel mills, slashed exports in half.

Shares of Sterlite, Sesa Goa drop after Goa suspends mining activity

Economic Times

11 September 2012

Shares in Sterlite Industries fell 2.6% and Sesa Goa dropped 5.8% after Goa temporarily suspended all mining activities starting on Tuesday

MUMBAI: Shares of Sesa Goa were witnessing sharp selling pressure on reports that the mining activity in Goa was temporarily shut after expert panel findings revealed serious illegalities and irregularities in mining.

According to reports, the state government issued a notification to suspend operations at all the 90 mines following the indictment of former chief minister Digambar Kamat by the Shah Commission.

The government has not banned movement of iron ore that has been already produced or stored. A verification & clearance committee will be formed to scrutinise operations before giving approval to resume mining. The order will be effective from Tuesday.

According to analysts, majority of iron ore produced by Sesa Goa comes from Goa mines. It generates close to 70 per cent of its volume from Goa.

The company has an annual iron ore production of about 13 million tonnes in Goa. Its FY12 total iron ore production stood at 13.8 million tonnes.

Bhavesh Chauhan, metal analyst, Angel Broking, while speaking to ET Now said that he has a neutral stance on Sterlite Industries and Sesa Goa following the mining ban in Goa.

He said that the suspension would not have too much of impact on Sesa Goa as July-September quarter is anyways seasonally weak for the company. However, he added that Sesa Goa faces royalty, global and volume challenges.

At 10:25 am, the stock was at Rs 160.25, down 5.60 per cent, on the NSE. It touched a high of Rs 163.40 and a low of Rs 157.85 in trade today.

Shares of non-ferrous metals producer Sterlite, which is set to merge with miner Sesa Goa to create Sesa Sterlite -- the eventual umbrella unit for other subsidiaries of the Vedanta Group, were 4.77 percent lower at 93.80 rupees.

The move by Goa to temporarily suspend mining activities, effective Tuesday, came after an expert panel formed by the federal government found "serious illegalities and irregularities" in mining operations.

Goa will, however, allow movement of iron ore already produced or that has been stored at ports.

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