Mining in Goa a rogue industry

India Dispatch: The inhabitants of Goa depend heavily on iron ore both directly and indirectly. But because of corruption and illegal mining a ban has now been introduced by the government, putting countless livelihoods in jeopardy.

Iron ore truck drivers in Goa sit around idly after mining was banned in the state. Gethin Chamberlain for The National

Panaji, Goa // Away from the carefree environment of Goa's beaches, turmoil is brewing in the Indian state's mining sector.

A ban on mining introduced this month following an inquiry that highlighted illegal mining in the state is expected to have a cascading effect on Goa's economy. With iron ore mining the second-largest contributor to the state's economy after tourism, thousands of Goans fear for their livelihoods.

But officials, environmentalists and even some mining companies say mining in Goa has become a "rogue industry" that has spiralled out of control and desperately needs to be brought into check.

"When mining stops, it is very difficult for the people in the state, who are very much dependent on mining," says Pramod Sawant, a vice chairman in Goa's government and the representative for the Sanquelim constituency. "They won't get any source of income."

About 90 per cent of the people in his constituency are directly or indirectly dependent on mining revenues, including mine workers, drivers and shopkeepers, he says.

Mining activity is limited during the monsoon season but business normally fully resumes by the end of September or the beginning of October. Mines across the eastern mining belt of Goa are currently deserted, with machinery covered in tarpaulins and barges that normally ferry Goa's workers or transport iron ore tied up at the jetties.

"What happened for the last five years is that there was no control in the mining in the state," says Mr Sawant. He blames the previous state government. "The material was exported without paying the royalties and in so many cases [illegal operators] are digging from other places. Illegal mining boomed in Goa."

Ninety mines were officially operational in Goa last year, the country's largest exporter of iron ore and its second-biggest producer of the material, with demand largely fuelled by China.

Last year, 9.38 billion rupees (Dh651.8 million) were generated in duties the state from iron ore.

According to the Shah Commission report on Goa's mining industry, operators going beyond their boundaries and "unregulated" and "unrestricted" illegal mining have resulted in 350bn rupees of losses to the state, as well as environmental destruction.

The report, which was submitted to parliament this month, prompted the state government to ban mining operations. On top of the suspension, the ministry of environment has suspended the environmental clearances of the mining leases.

Other problems rife in Goa's mining sector include corruption that means a blind eye was turned to many of the pitfalls, industry sources say.

There is no information on when the ban is likely to be lifted.

Haresh Melwani, the chief executive of HL Nathurmal, a mining company in Goa, hopes he can resume operations at his mine within a month but he notes it could be two to three years before some of the mines in Goa would be allowed to restart operations.

"There has been a total lack of governance," he says.

"Now you have finger-pointing at everybody."

The mine produces 73,500 tonnes of iron ore each year, worth about 73m rupees. He estimates, before the ban, he would have produced about 5m rupees worth of ore this month.

Even Mr Melwani admits there is too much mining activity in Goa and this needs to be monitored and addressed.

"Mining is a destructive business," he says. "Mining cannot be done without destruction. I think there's too much [mining].

"In the past eight years it has become like the Wild West. All sorts of colourful politicians have got into the act because it's big money in a short time. It was almost like everyone in Goa was an iron ore trader," says Mr Melwani, who says even taxi drivers were selling iron ore.

When the Bharatiya Janata party government came into power in Goa in April, it cracked down on iron ore traders by calling on them to register for verification, which scared off many, he adds. The new state government is also introducing various systems, such as tracking, to try to ensure royalties from all trade of iron ore are collected.

But thousands of contractors across Goa who work in the mines will be left without work because of the ban and there are many more who are part of the industry.

Praveen Blaggan is the owner of Siyaram Mines and Minerals, an ore trading company. He says the ban is threatening the livelihoods of the 100 people who work for him.

"No work, no pay," says Mr Blaggan. "It has come to an abrupt halt. That is wrong. We don't know what to do now. We are now at the mercy of the central government and the state government."

He explains his village of Sankhali is largely dependent on mining.

"Shopkeepers will suffer because there's no money. The total economy will collapse. There will be social problems."

Prakash Rautdesai, the president of the South Goa Truck Owners' Association, is very concerned.

Many of the lorry owners have taken loans from banks of about 1.5m rupees to operate their vehicles and they will be unable to make their bank repayments if there is no iron ore to transport, he says.

"They have no alternative income. People will really suffer. There might be no alternative but suicide."

But activists say the industry desperately needs to be reformed and controlled for the long-term health of Goa's economy and environment.

"This is a mining industry gone completely rogue," says Oscar Rebello, one of the best-known social activists in Goa.

"I think the mining ban is absolutely necessary for us to clean the slate and start afresh.

"Both the traditional players in the mining industry and fly by night operators have completely devastated the land, devastated agriculture, made the entire population out there physically, financially, psychologically dependent on the mining operations."

He says an overhaul is essential for the mining industry to remain viable but, at the same time, Goa needs to consider alternative economic models.

"According to the mining industry themselves, the iron ore is expected to get depleted in six or seven years," says Mr Rebello.

"So I don't know what is the alternative the government is thinking about for all the people who are dependent on mining on the eastern side of Goa.

"I don't know what the alternative economic model is."