Vedanta set to resume Goa iron ore mining next week

Vedanta will restart iron ore business in Goa on August 10 after a closure for nearly 3 years. It will be a ceremonial reopening, scheduled to be formally inaugurated by Goa Chief Minister Laxmikant Parsekar, a person in the know of the development said.

The actual operations will begin post monsoon around the second half of September, he added. The Anil Agarwal-led firm has a permission to mine 5.5 million tonnes per annum (<g data-gr-id="31">mtpa</g>) of the total permitted 20 million tonnes (mt) capacity for iron ore production in Goa by the Supreme Court. “As of now, approvals have been obtained for <g data-gr-id="32">Codli</g> mine, which has 3 leases and 3 million tonnes permissible production capacity (out of 5.5 <g data-gr-id="33">mtpa</g>),” he said.

The company is making its best efforts to begin mining at the earliest. Bicholim is another mine for which all permissions have been granted, which means approval of the mine plan from IBM and NOC from Goa Pollution Control Board on water and air pollution, he added. Vedanta Ltd will commence operations at a time when iron ore prices are at their lowest. Since the closure of mining operations in September 2012, prices have crashed to $32-33 per tonne for Goa grade of iron ore (average grade 58 per cent FE) from a peak of about $140 per tonne in 2012.

On the reasons behind commencing operations despite the unviable low prices, a senior company official said the firm has been paying salaries and wages to all its nearly 4,000 <g data-gr-id="36">workforce</g> for last 3 years, incurring around Rs 1 crore a day. “Vedanta’s iron ore business has paid over Rs 1,000 crore as salaries and wages without generating any revenues as all workforce is sitting idle due to <g data-gr-id="34">closure</g> of operations. Starting them will at least will help us fill some of that gap,” the official explained.

The Goa government temporarily banned iron ore mining in September 2012 pending verification of documents in the wake of Justice M B Shah Commission’s report.

During the same month, Environment Ministry had put the environment clearance granted to the mining leases in Goa in abeyance. In October 2012, Supreme Court imposed a blanket ban on mining while hearing a petition. It lifted the ban in April last year, but with conditions.