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Mining Corporation Is Not A Good Idea

THE government proposes to explore the possibility of starting mining operations on the leases other than the 88 that have been cancelled by the Supreme Court in order to mitigate the problem of unemployment among workers engaged in mines and ore transportation. However, it has to be first legally determined whether the other leases can be made operational according to the old procedures without inviting the disapproval of the Supreme Court.  The government must get a clear opinion of the Advocate General of Goa and the Attorney General of India on this as any wrong step would further complicate the mining scene. Secondly, the government will have to sort out a number of issues before it can implement its proposal.  They have to exclude leases that are located in protected areas or within the one-km buffer zone in which mining is prohibited. These issues will take time to study. The demarcation has to come with clarity.  Thirdly, there are mining leases whose holders have not paid stamp duty; that has to be sorted out.

The figures of workers affected by mining shutdown are put at well above a lakh. Thousands of workers employed by the trucks and barges that were engaged in transportation of ore have been rendered jobless. Mining companies are shedding labour. Vedanta, the largest mining company, has asked some of its employees not to report for duty with immediate effect until further notice. Other companies have made no announcement, but it is obvious that they too would not like to be burdened with paying of salaries when there is no work. The situation is desperate for the people rendered jobless. The state government has to find ways to help the mining unemployed get jobs. If the mining leases other than the 88 cancelled can be made operational as fast as possible, they can get some relief. However, the possibility of that happening – if it ever happens – in the near future is very bleak. Although there has been some talk of finding alternative employment for the mining unemployed, the idea seems to be impractical. What type of alternative employment can the government generate for them? The government does not have resources to start or support a wholly new kind of economic activity in order to generate employment for them? Though it may not be easy for the authorities to create hundreds of jobs, they could explore the possibility of accommodating them in the ongoing or upcoming projects in the state, like the work on construction of roads or the Mopa airport project.

There is another proposal doing the rounds, which is, that the state government form a corporation to operate mines on the lines of similar entities in other states. The proponents of the idea feel that a corporation would be able to get approvals from the statutory authorities faster. Trade unions and environmentalist groups have also been asking for setting up of a state corporation for mining. If a corporation is to be formed the government would have to start from the scratch. There is no clarity on where the capital for the corporation would come from. There is no clarity either whether the corporation would run all the mines with its own workforce. That would mean employment of a very large number of people at all levels and from various fields, which will mean a very high staff cost. Such a corporation will also have to have its own machinery or hire machinery on a large scale. Or is it that the corporation would have all the leases, get all the approvals from the central government and statutory agencies and then contract the operations out to private companies? If that happens, the government has to make sure things have to be handled strictly with professionalism and transparency, so it gets good profits.

However, we have to keep in mind that most of the state-run corporations are running in loss and surviving on funds from the government. Public sector undertakings in mining or other sectors in other states are not making profits as the private companies do. A mining corporation could therefore turn out to be a money guzzler and a liability to the Goa government, which is already burdened with financial problems. The idea might be very tempting to some of the MLAs from the mining belt who have their fingers in the mining pie. They could hope to call the shots in the corporation in order to get a bigger share of the mining pie. Even if the corporation hires professionals to manage and run the mining operations, the politicians would force them to make compromises.

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