‘Getting leases renewed is priority’

Print edition : September 19, 2014

Shivanand Salgaocar. Photo: Vincent Braganza

Interview with Shivanand S. Salgaocar, president of the Goa Mineral Ore Exporters Association.

On the resumption of mining, as stated in the Chief Minister’s recent announcement, are you optimistic about the time frame or do you foresee hurdles ahead?

It is very welcome. The only concern is his proposal to raise additional revenue from the leases by way of a charge on “soil”.

Given the fact that the current downturn in the international steel industry has resulted in a price drop of over 35 per cent for low grades of ore which constitute a major portion of Goa’s production, and the 10 per cent charge levied by the Supreme Court only for Goa, the hike in royalty from 10 per cent to 15 per cent and other State and Central (30 per cent export) duties, the very viability of the Goan mining industry is threatened. There is no scope for any further levies.

We have been shut from June 2012 and it has seriously impacted the State’s economy, including the State government’s revenue from royalties and other levies on related service providers and inputs. Hence, I am hopeful that our Chief Minister’s deadlines will be met. Of course, we need to get a number of statutory clearances/approvals once the leases are renewed.

Is the industry expecting it to be litigation-free? It is problematic because of the extant Supreme Court case, and the current thinking on auctioning of national/natural resources.

Let us get one thing straight. Neither the MMDR Act [Mines and Minerals (Development and Regulation) Act] nor the rules provide for the auction of iron ore mines. Auction as an option has also clearly been ruled out by the Supreme Court in its judgment on Goa mining. The High Court in its recent judgment has held that (a) the Supreme Court judgment in no way impedes the State from executing the leases; (b) that the State should execute the lease deeds for those leases for which it has already collected stamp duty; and (c) decide on the others within three months. Hopefully, this should clear the air for the expeditious resumption of legal mining.

Will Goa be able to get back its market share internationally, or has too much changed since then?

The Australian mining majors have added over 180 million tonnes over the last two years and are still expanding. They have the capacity to control the market. Moreover, the market has not expanded so it will be difficult for us to get our fair share. The cap imposed by the Supreme Court will further seriously restrict our capacity to compete.

How does the industry work out a 20 million tonne cap? Who will decide on who exports how much?

We will cross the bridge when we come to it. Our priority right now is to get our leases renewed.

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