Unlocking The Mines


State corporation must function In  a professional and efficient manner

CHIEF Minister Pramod Sawant has announced that the government is going to set up a special organisation to look after mining in the state called Goa State Mining Corporation to restart ore extraction. A bill to establish a public sector undertaking is expected to be introduced in the Assembly during the ongoing budget session. Mining was shut down in the state after the Supreme Court nullified renewal of mining leases by the Goa government in 2018. The government has said that it intends to resume mining in the current year but has given little details how it would go ahead. Though formation of a state corporation to resume mining was a demand of the mining dependants since the closure of mining, the government did not accept it, saying it was exploring other options – seeking judicial review and a legal cure to the problem. After working on those lines for nearly three years the government has perhaps realised that its options may not yield the desired results and so decided to set up a corporation.

The government decision on setting up a state corporation has been welcomed by the mining dependants and the captains of the mining industry. However, doubts have been raised in various quarters whether the new government entity would deliver on the expectations of the people. Some experts are of the view that though formation of the corporation is perhaps the best possible option under the current scenario and well within the powers of the state government, the fact remains that the new entity will have to seek a number of approvals, clearances and permissions from the central government and its agencies overseeing and regulating mining. The approvals for resumption of mining would have to be sought afresh by the corporation and that might not come easily, quickly and without questions. The new entity will have to seek at least 20 clearances from various central government agencies before the mining can restart. Such clearances cannot be obtained without meeting the regulatory rules and restrictions even for a government entity, especially a new one. According to the existing protocol, it could take up to 270 days for environmental clearances and 570 days for forest clearances to be obtained from the concerned central agencies.

The central government rules require every new lease to be auctioned. By deciding to set up a state corporation the Goa government has given the powers to grant leases to itself (subject of course to all approvals by the central agencies). That would mean that the leases would not go to bigger players from outside that could have out-bid Goan businesses in the auctioning process. The fear about mines going in the hands of big players from other parts of the country has been one of the major concerns why the state government has been trying to avoid auction, since the Supreme Court order made auction a necessary process. Though one of the major concerns has been addressed, the state should explore how to get the required permissions for resumption of mining faster. The Chief Minister has said that to facilitate the resumption of mining the state would sign a memorandum of understanding with the Mineral Exploration Corporation Ltd to carry out mapping of mineral resources in the state and identify potential mining sites, which is one of the requirements under the new mining laws that came into effect in 2015. The real challenges will come in getting approvals for mining operations at the identified sites. 

Goa has 17 public sector undertakings, of which four have been perennially in the red. Most others have barely managed to remain afloat. The only PSU that has been doing well consistently is the Economic Development Corporation( EDC). There is demand for low-Fe iron ore extracted in Goa but much will depend on how the new corporation functions and delivers. Doubts have been raised on whether the mining corporation, which like other PSUs. is expected to be headed by a politician and run by bureaucrats with no expertise in mining, can really be run successfully. However, the government has rekindled the hope among mining businesses and dependants. We hope it delivers the goods.