Mining Illegality

Even as giant earthmovers gouge out the red iron ore from mines in Goa, another scandal in India’s mining sector has been unearthed. The latest “scam” concerns dozens of illegal iron ore mines in Goa that have successfully evaded the state machinery and exported several million tonnes of the ore without paying royalty. The loss to the state exchequer is still being calculated. As with the Bellary scandal exposed earlier this year in Karnataka, once again we see the hand of the state’s top politicians working closely with those breaking laws to maximise profit. Goa’s Chief Minister Digambar Kamat is in the eye of the storm. He was in the Bharatiya Janata Party (BJP) before he switched sides to join the Congress. He has also headed the department of mines for 12 years. Whether he pulls through this crisis or is forced to step down like his Karnataka counterpart B S Yeddyurappa is only a small part of the story. In fact, the mining scandals in Goa and Karnataka illustrate how greed is not the exclusive property of one party; it happily crosses party lines.

Unlike Karnataka, where the problem was rooted in one extended family, in Goa the share of the loot has been spread over many individuals. In a state that covers 3,702 sq km, Goa has 89 working “legal” iron ore mines, all of them privately owned. For mine owners and those providing ancillary services such as transport, revenues grew hugely with the growing demand for iron ore especially from China in the run-up to the 2008 Beijing Olympics. All iron ore mined in Goa is exported and the last decade has seen a threefold growth in volume, peaking at 53 million tonnes in 2009. This growth in demand has also fuelled overextraction and the operation of “illegal” mines that export close to 11 million tonnes of ore a year. The loss to the exchequer is estimated to be anywhere between Rs 3,000 crore and Rs 10,000 crore.