Go local for Goa mining, achieve the mandate of Atmanirbhar Bharat

Prior to 19th Dec 1961, Goa was a Portuguese territory and mining concessions granted under the Portuguese Mining Colonial Laws 1906. After Goa becoming the part of Indian union in the year 1961, mines and minerals development and regulation act 1957 was extended in Oct 1963 to Goa. In the year 1975, notices were served to mining concessionaries under the mining lease modification terms rule 1956 by the controller of mining leases to bring it in parity with provision of a MMDR act, Mineral concession rule and MCDR.

So adrift by these notices, mining concessionaries went to Bombay High court and Bombay High Court in its judgment on dated 25th September 1983, restrained the Government of India or Union of India from treating this concessions as mining lease. The union of India brought in a piece of legislation that is called Goa Daman Diu Abolition and Declaration as mining lease act 1987 which is commonly known as Abolition Act 1987 and it received presidential sanction on 23rd May 1987.

To understand the stalemate, 23rd May 1987 becomes very important date. Briefly the High Court upheld the validity of the act but it said that it cannot be applied retrospectively, it has to be applied prospectively. (I.e.read down Section 22(1) (a) of the Abolition Act to be prospective). In the abolition act 1987, it was mentioned that the appointed date was however, 20th Dec 1961, thus, the provisions were applied retrospectively. The retrospective date was only to raise additional retrospective royalties and dead rents and avoid refunds to the miners collected between 1961 -1987.

However, against this judgment of the Bombay High court, the concessionaries filed the SLP in the Supreme Court. In its interim order on 2nd March 1998, the concessionaries were permitted to carry on mining operations in the area where lease renewal applications were filed and fees and other royalty to be paid as per the MMDR act prospectively.

The SLP is still pending before the larger constitution bench of the honourable Supreme Court. Mineral concessions conflict petition continues and the matter is still undecided.

It is important to understand the mining history of Goa prior to Sept. 2012, before tabling of the MD Shah report about the illegal mining. Goa was an exhibit as to how to carry mining in eco-friendly manner. Reclamation and Rehabilitation were done systematically.

Since 2007 onwards due to the iron ore demand globally, Goa’s production and export capacity grew to touch 50 Million tons. This led to general unrest by the Public due to limited infrastructure and other parameters.

However, after the Shah Committee report was tabled in the parliament then the government of Goa closed down the operation, 2012 followed by the Supreme Court to suspend operations from October 2012 onward to 2014. Vide its order dated 21/4/2014 , the Hon’ble Supreme Court lifted its ban but put a carrying capacity in the State of Goa to 20 million tones.

Hence from resumption in operations thereafter commenced in 2015-16 with of which hardly 29 mines (of the renewed mines) could be operated during that period and the production reduced to only 7.7 million tons. Then 2016-17, another 43 mines could operate to produce 20 Million tons and in 2017-18 it was again down with 10 million tons because on 7th Feb 2018, the judgment that said that all the operations has to be stopped by 15th march, so from 16th March 2018 onwards mining has stopped.

The Industry Association, workers and other stakeholders have since represented to the Central government the need to resume mining operations.

The State Government too has since August 2018 till the present day made several representations to the Central Government emphasizing the need to resume operations by synchronizing the Abolition Act and the MMDR 2015 Act. There is a scope under existing provisions to ensure resumption.

Additionally Review Petitions, SLP’S /Writs have been made to the Supreme Court by the Miners, State as well as Central Government.

In the month of January 2020 there was a temporary relief wherein the Supreme Court vide its judgment judgment from the present bench of the Supreme Court allowing for transportation of ore already extracted for 6 months

As mentioned earlier Goa has a mineral resource about 1.4 billion ton out of the total India resources of 32 billion ton and this closure of mine has already impacted to local population; the people who are directly or indirectly affected are around 3 lakh.

IMPACT ON

ECONOMY DUE TO

NON RESOLUTION OF STALEMATE ON THE EMPLOYMENT, LOWERING OF INCOME AND THAT OF STATE GDP

The adverse impacts of this mining suspensions need to be understood if Goa is to be local and become Atmanirbhar.

If we take the time lines from 2012 onwards, at the peak in 2011-2012 the foreign exchange earning of the sector in Goa was over 3.3 billion dollars now there was a substantial amount of revenue been earned by the direct stakeholders of 250,000 people. Closure of mine has impacted 1 in every 5 people in Goa. So after the 2012 suspension for over 8 years cumulatively the industry has not even earned more than 200 million dollars, resulting in 8 years of negligible earning and economy in absolute suspension.

Mining has been stalled in Goa ever since the Supreme Court quashed renewal orders of 88 mining leases in the state on February 7, 2018. This decision directly impacted 60,000 households and 3 lakh livelihoods. It has disrupted an entire eco-system of allied industries, including logistics suppliers, truck companies and barge owners as well as equipment suppliers, machinery owners, port. Mining was Goa’s largest industry in 2018. Economy of Goa is said to have lost Rs 3,500 crores in the first year itself.

Goa from having its main industry suspended for last 8 years now and main industry tourism has been put to suspension due to the pandemic the state is dealing with strong economic financial crisis. The impact on economy is that a state which was considered the wealthiest state in the country in 2012 with its one industry that was contributing 20% to state’s GDP completely shut down, the state’s debt has increased by over 120%,

The mining industry that for over 7 decades had developed by investments in logistics, beneficiation and creating a niche in international market has lost all. Goa Mineral Ore Exporters’ Association (GMOEA) is the apex trade association representing the Mineral Ore Industry in the State of Goa.

Iron Ore Mining has been an integral part of Goa industry for over seven decades primarily because of its inclusiveness and sustainable practices. Goa is presently faced with unprecedented unemployment rates because of the mining ban and this situation will be greatly exacerbated by the damage done to tourism and other industries in the State due to the COVID-19 pandemic.

Mining operations have been completely banned in Goa from 16th March 2018 ever since the Supreme Court cancelled 2nd renewal of 88 nos of mining leases in the state vide its order dated 7th February 2018. It has disrupted not only the mining sector but also entire eco-system of allied industries, including logistics suppliers, truck companies and barge owners as well as equipment suppliers, machinery owners, barge owners, port. Mining Operations in the State has stopped since 16th March 2018 and its resumption is extremely vital for overall socio-economic growth in the State and in the present dire situation, most critical.

Nearly 3,00,000 of the population is directly or indirectly depends on the Mining Sector. Apart from the workmen, the Transport

TABLE 4: SOURCE OF REVENUE RELATED TO MINING OPERATIONS IN GOA

Category

Revenue / Taxes per annum ( Rs)

Rs 1100 Crores

Sector, namely, the Trucks used for road transportation, the Barges which are used for transport through rivers from jetties, big vessels has been affected. Indeed, it is a matter of record that the country on account of stoppage of Mining Operations, has suffered a loss of nearly 8 billion dollars. Stoppage of the Mining Operations has a cascading effect of a vicious nature. Not only those who are directly involved in mining such as the mining companies, truck operators, barge transporters, mining machinery owners, but small time business/industry such as tea stalls, automobile workshop, petrol pump, consumer goods vendor, road side tyre service provider etc., have all suffered.

Further, exposure of Financial Institutions including Banks is more than Rs. 850 crores as loan/advance on Mining Sector to trucks, barges, mining machinery etc., to small time operator besides which advances of housing/consumer loan and other mining companies exceeds Rs. 1000 crores.

There are around 20,000 trucks estimated to be used for Mining Operations; out of which, altogether 12546 which engaged in transportation of Iron Ore have been registered so far with the Mining. The stoppage of mining operations has impacted owners, drivers, operators, and sailors who were depending directly on the mining operation besides impacting service provider to this sector. This has also affected the Banking Sector, more particularly small Co-operative Banks, which had advanced loans to the truck owners at the time of purchase of the trucks. In fact, non-payment of the installments has adversely affected the financial state of the smaller Co-operative Banks and Societies.

There are around 375 Barges estimated to be plied for Mining Transportation; out of which 223 barges have been registered so far with the mining department in the State of Goa which are primarily engaged in transportation of mining ore. Stoppage of the Mining Activity has stopped all the Barge Transport thereby affecting their owners, staff and their families.

There are around 220 Mining Machineries so far registered with the Department of Mines & Geology. Presently due to stoppage of the Mining Activity, these Machineries

Remarks

Includes Royalty, DMF, GIOPF, NMET, VAT on diesel, other GST related

Over 12000 Trucks, nearly 150 Barges, ancillary units.

@ Rs 600/ Ton Operations restricted Within Mining Lease, Handling Ore: Overburden Ratio, re-handling

and the staff employed on these Machineries are not being used at the Mines.

The aforesaid facts would demonstrate that stopping of the mining activity had a cascading effect on the overall economy; and it has directly affected all the persons who were directly or indirectly dependent upon Mining. Apart from this, this has directly affected the State Revenue, resulting in loss of more than Rs. 3500 crores, amounting to around 22% of States own revenue.

Revenues across stakeholders by its resumption would be substantial and will generate over Rs 3500 Crores/ annum by the Mining Industry alone besides giving to a much-needed boost to the national foreign exchange reserves to the tune of approximately USD 800 million (i.e ~Rs 6000 Crores) at current index price levels assuming a maximum extraction of 20 million tons. Sources of revenue would include (check Table 4):

During the first suspension in 2012, Goa itself took number of initiatives in improving the checks and balances, collected over 1600 crores of stamp duties and other fiscal fees and restarted the work 2015

2018 judgment prevented Goa, unlike any other state in India, to renew leases prior to MMDR Act 2015, as the issue related to Abolition Act is still not resolved. The resultant is Goa is not able to do anything to renew leases. This has left Goa in a catch 22 situation,

Goa mining issue stalemate is to deal with multiple judgment, multiple statutes, having been given birth through abolition act and been regulated through MMDR act, all of these have resulted in this stalemate. The criticality of the situation in Goa is most the companies have maintained all their employees and staff despite the 8 years of shutdown. Assets are being maintained, mines are being maintained, and environmental measures are being maintained despite the suspension, so Goa can effectively commence mining in a period of 3 months once there is clarity on issue that one can conduct business.

Besides Goa has lost its market share in this last 8 years and that market share has been taken over by countries like Brazil and Australia and it will take some time to get back that market share and the key ingredient to get back that market share is the reliability as a supplier and thereby clarity of tenure of leases, clarity that if one comply with relevant statutes etc one will be able to conduct mining operations.

CONCERNS OF THE STATE GOVERNMENT AND MINERS OF GOA

The State Government and the industry and experts Miners are unanimous to end this stalemate and have has referred to a number of legal experts, the entire assembly unanimously has put in their request to the central government. The mining industry was a major revenue and employment generator for the state and at its peak contributed close to 30% of the State’s GDP.

A review petition was filed by the Goa government against Supreme Court’s February 2018 verdict A special leave petition by Vedanta Ltd, the largest mining company operating in the state, challenging the Goa Government’s rejection of its request to extend the company’s mining lease by 50 years from 1987 to 2037, in terms of Section 8(A)(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).the Mines and Minerals Development Act as amended in 2015/2020 states that all mining leases that were operational before the amendment came into force “shall be deemed to have been granted for a period of fifty years.”

The SC in its order dated February 2018 held that the renewal orders of 88 leases be quashed as it believed that fresh Mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted. It may be noted that prior to the ordinance issued in January 12, 2015 Renewals were permitted under the MMDR Act and the concept of 50 years from date of grant was not available before the State of Goa.

The Goa Government has backed Vedanta’s plea and said it is prima facie in agreement with the company’s contention but for the Supreme Court judgment which “is quite clear in as much as all mining operations in the State of Goa ordered to be stopped with effect from 16/03/2018 until fresh mining leases or other renewals and fresh environmental clearances are granted.

Earlier this week, Governor Satyapal Malik in his maiden address to the Goa Legislative Assembly, said that his government “is very optimistic of resuming mining operations in Goa during the ensuing season thereby rejuvenating the state’s economy”.

03/08/2018-State has passed unanimous resolution

“This House urges the Central Government in its wisdom to take all such necessary steps, including appropriate Legislative measures to ameliorate the social and economic chaos which has befallen the State of Goa and its economy, due to the complete closure of Mining operations in the State. The Legislative measures are needed to harmonise Mining Law specifically enacted for Mining Concessions in Goa with the amendment of 2015 to the Mines and Minerals (Development and Regulation) Act 1957 by the central Government so as to ensure that under the federal spirit, Goa is on an even keel with the rest of the country keeping in mind its uniqueness.”

The latest letter written by the State Government to the Honourable Prime Minister in 2020 once again emphatically has requested to resolve the issue.

Harmonize two acts The MMDR (Mines and Minerals Development and Regulation Act 2015 and The Goa Daman & Div Mining Concession Abolition and Declaration as Mining Leases Act 1987.

Hence the challenge is weather to await legal remedies in SC or the policy making is to be done with clarity by the government to solve and resolve the stalemate. The role of courts is to clarify and interpretation in case of ambiguity. Here, ball is clearly in the court of government to remove the confusion between the two acts for problem solving to this stalemate.

The centre filing of affidavit confirming that rights do subsist with the existing leaseholders , and state gone for review petition, of suspending mines in Goa, if the act and policy itself clarifies the issue the matter ends.

3. How to restart by consistent and credible holistic approach to boost the economy of Goa and Unlocking stalemate

The State Government as well as industry and experts are unanimous to end the stalemate. The entire state Assembly unanimously has put in their request to the central government to end the stalemate and recommence mining operations at the earliest. The mining industry was a major revenue and employment generator for the state and at its peak contributed close to 30% of the State’s GDP.

The criticality of the situation in Goa is most the companies have maintained all their employees and staff despite the 8 years of shutdown. Assets are being maintained, mines are being maintained, and environmental measures are being taken despite the suspension of mining operation. Goa can effectively commence mining within a period of 3 months once there is clarity on issue that one can conduct business. Besides Goa has lost its market share in this last 8 years and that market share has been taken over by countries like Brazil and Australia and it will take some time to get back that market share and the key ingredient to get back that market share is the clarity of tenure of leases, clarity that if one comply with relevant statutes etc. Thereafter one will be able to carry-out mining operations.

Goa is very prime, Goa mining is prime, the iron ore is bringing lot of foreign exchange to this country, when we have a deficit balance of trade one cannot have a problem that is precipitating and adversely having an impact to the prosperity of the people of Goa and the economy of the state. The above analysis and deliberations is to capture the concerns of the Goa government, concerns of the Central Government, the holistic approach to move toward the “Atamnirbhar” and be “Local “and satisfy the legal requirements will need to be on the drawing board and end the stalemate. The slogan of Atmanirbhar and going Local will turn to reality on resolution of the entangled issues at the earliest. If intension is to entangle, solution is proposed as outcome of this webinar. 1. The concessionaries filed the SLP in the Supreme Court and got its interim relief. The SLP is still pending before the constitution bench of the honorable Supreme Court. This SLP need to be withdrawn by the concessionaries.

2. The Central government to come forward to resolve the issue of date of applicability of Abolition Act 1987 and MMDR amendment of 2015/20 by accepting the prospective time period of lease from introduction of Abolition Act on 23rd May 1987 for 50 years ie till 2037,

Section 8(A 3) of MMDR Act 1957 read with 8(A 6) does provide that all mining lease granted prior to the year 2015 shall be deemed to have been granted for 50 years

The Section 8 (A) clearly states that:

(1) The provisions of this section shall apply to minerals other than those specified in Part A and Part B of the First Schedule.

(2) On and from the date of the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, all mining leases shall be granted for the period of fifty years.

(3) All mining leases granted before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 shall be deemed to have been granted for a period of fifty years

4. In its judgment of the 7th Feb 2018, The Supreme Court, made it crystal clear that mining in Goa will cease “until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted. Thus accepting the date of application of the Abolition Act 1987 with prospective effect from 23rd May 1987, the existing mining concessions/leases of Goa can be considered deemed to have been granted for 50 years with effect from 23rd May 1987 as per under section 8(A)(3) of MMDR Act 1957. It will enable to make a beginning to end the stalemate.

5. To have clear cut directions ensuring various steps to be taken to address various mining allied challenges in time bound manner for sustainable mining in Goa.

There is urgency to decide during the monsoon with a credible and consistent way forward is necessary, so that operations can start post monsoon. The environment clearances like given to the existing auction of lease in rest of the country for two years to the existing mines be simultaneously provided. All the above recommendations are to be resolved at one stroke if intention is to make Goa a prosperous Atmanirbhar state. Dr Aruna Sharma has served as Secretary, Govt. of India. She is a development economist and served as Secretary, Ministry of Steel; Secretary, Electronics and Panchayati Raj. She also held charge of Rural Development and Panchayati Raj in Madhya Pradesh government. She conceived and launched governance software like Samagra, now operational in 10 states and coordinated for Direct Benefit Transfer. She was member in five-member high level committee of RBI for deepening digital payments.

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