Goa says decks clear for iron ore mining to resume

Goa has removed a two-year ban on iron ore mining and expects mines could be back up and running by March or April at the earliest, Goa's Director of Mines and Geology Prasanna Acharya said on Friday.

India was once the world's third largest iron ore exporter and Goa its biggest exporting state. The return of Goa iron ore exports could further pressure global prices hovering around 5-1/2 year lows due to oversupply.

Acharya said it is now up to mining companies to obtain environmental clearances from New Delhi to start work.

"It's possible that the mines will be active in a couple of months as we have acted fast on renewing the leases" Acharya told Reuters.

"March or April in the best-case scenario or else it could go to October because of the (June-September) monsoon rains."Goa used to export about 50 million tonnes of iron ore a year before the mining ban was imposed in 2012 after a government report on illegal mining.

The ban in Goa and curbs in other producing states like Karnataka and Odisha have made India a major importer.

India's imports hit a life-high of 8 million tonnes in 2014, far above the 3.1 million for 2012, according to commodities consultancy OreTeam, based near New Delhi.

That has worried Prime Minister Narendra Modi's government, which on Monday issued an executive order to revive the mining industry by quickly renewing old leases and auctioning out new leases, scrapping a previous method of selective allocation.

Aniruddha Joshi, a vice president in India's top private iron ore miner, Sesa Sterlite Ltd, said the executive order and the revoking of the ban in Goa suggest that "things are looking up".

But even if mining resumes in Goa, the falling prices of iron ore and an export duty of 30 per cent will make exports uncompetitive for many companies in the state.

Image: The open pit of Sesa Sterlite iron ore mine in Codli village in Goa. Photograph: Krishna Das/Reuters