Sesa Sterlite may resume iron ore mining in Goa in two months: report
18 March 2015
Sesa Sterlite Ltd, India's biggest iron ore miner, will start mining again in Goa, India's biggest iron ore exporting state, in two months, as the environment ministry has lifted a ban on mining in the state, imposed in 2012 as part of a crackdown on illegal mining.
Shares of Sesa Sterlite Ltd rose as much as 5 per cent on Wednesday after environment minister Prakash Javadekar said on Tuesday he had lifted a ban on mining in the state.
However, with global prices and demand for iron ore at a low, exports are unlikely to be of any significant value since the low-quality ore from Goa is uncompetitive.
Goa is pushing for a cut in the 30 per cent export duty for its low-iron-content ore that is not widely consumed by Indian steel companies, Reuters quoted Parag Nagarshekar, deputy director of the state's directorate of mines and geology, as saying.
China used be the biggest consumer of Goa's iron ore.
Finance minister Arun Jaitley had recommended the duty on iron ore unchanged for the next financial year starting 1 April.
The Supreme Court had, meanwhile, relaxed curbs on iron ore mining and last year gave is go-ahead to resume mining in the state, subject to environmental clearances, but capped total production at 20 million tonnes a year, less than half peak output.
Iron ore exports from India as a percentage of production have fallen from 47 per cent in 2009-10 to 11 per cent in 2013-14.
Despite curbs on iron ore mining, steel continues to be a deregulated sector and the role of government is that of a facilitator for encouraging industrial growth. The decision regarding increasing production or setting up of a plant is taken by the entrepreneur based on prevailing market conditions and economic viability of the project.