Indian court lifts ban on iron ore mining in Goa

21 April 2014 (Last Updated April 21st, 2014 18:30)

The Supreme Court of India has lifted the 18 month old ban on iron ore mining in Goa, but has limited the production rate to 20 million tonnes (Mt) a year.

The Supreme Court of India has lifted the 18 month old ban on iron ore mining in Goa and has limited the production rate to 20 million tonnes (Mt) a year.

The ban was set by the apex court in October 2012, following a report by Justice MB Shah Commission, which said that illegal mining in Goa had incurred a loss of Rs350bn ($5.76bn) in the past 12 years.

Following the report, the Supreme Court banned mining in 90 state mines and carried out investigations into operations.

However, the ban in Goa and similar bans in Karnataka decreased India's iron ore exports by 85% or 100Mt in the last two years.

A panel selected by the Supreme Court claimed that Goa is the top iron ore exporting state in India and that its contribution is crucial for the country's mining industry. The panel recommended the court to lift the ban and cap the production output.

"The ban in Goa and similar bans in Karnataka decreased India's iron ore exports by 85% or 100Mt in the last two years."

Federation of Indian Mineral Industries (FIMI) Secretary General R K Sharma has welcomed the order, saying that it will bring the mining industry back in Goa.

"It will create employment and boost the economic activity," Sharma told PTI.

The Supreme Court's order has also cancelled the mining leases of mining companies that secured lease extensions after 2007 and those that have completed their 20 year renewal periods.

In addition, the court ordered that no leases will be granted for mining activities within 1km of a national park or wild life sanctuary.

Employees of mining companies who were out of work will receive half of their salary for the 18 month period that the ban was upheld.

According to the Supreme Court, the final mining capacity in the state will be decided by an expert panel in the next six months.

India was the world's third-largest exporter of iron ore but is currently the tenth largest.