India’s top court yesterday allowed iron ore miners to resume operations in the western state of Goa after imposing a ban 18 months ago for environmental breaches.
The state can produce a maximum 20mn metric tonnes a year, a three-judge Supreme Court panel headed by Justice AK Patnaik said in its order. The limit will cut output to the lowest since the year ended March 31, 2005. The court asked a panel to submit an environmental impact report in six months and give its assessment on increasing the output limit.
The restart of mining may raise supplies of the steelmaking raw material in the world market, especially to China, which used to buy most of Goa’s ore before the ban. Miners including Sesa Sterlite, owned by billionaire Anil Agarwal, and Timblo Group will benefit from the resumption of ore extraction.
Shares of Sesa Sterlite, which owns the biggest mines in the province, surged as much as 7.4%, the most in eight months, to Rs207 and traded at Rs205.40 as of 2:51pm in Mumbai. All mining in the state after 2007 is deemed illegal, the court said in its order. It ordered that 10% of the ore sale proceeds be used for welfare programmes and asked the Goa government to prepare a report on how it plans to use the fund.
The Goa government, acting on the counsel of a panel set up by the mines ministry to probe mining violations, imposed the ban in September 2012. The following month, the top court upheld the ban and halted transportation of ore, similar to its sanction in southern Karnataka state the previous year.
The two adjoining states at that time produced almost half of India’s output of iron ore as demand soared amid China’s economic boom. Goa lost an estimated Rs349.4bn ($5.8bn) because of illegal mining, the panel, headed by retired judge MV Shah, said in a report at the time.
A separate panel set up by India’s top court last month recommended lifting the ban in Goa, albeit with conditions that included lowering production. In November, the court allowed miners in the western state, which exported almost all its ore before the ban, to sell unsold inventory.