KOLKATA (miningweekly.com) - Some 57 iron-ore mines in the western Indian coastal province of Goa have been granted pollution clearance, allowing for the resumption of mining activities. However, operations were unlikely to restart immediately as there were no takers for the raw material in the wake of the crash in international prices.

According to a provincial government official, the local mines and geology department had issue environmental approvals to the 57 mines but imposed stricter conditions relating to water and air monitoring systems.

These mines would be able to produce about 14-million tonnes a year of iron-ore, depending on their respective de jure mining plan approvals by the India Bureau of Mines, the official added. This production would be within the overall cap in production of 20-million tonnes a year set by the Indian Supreme Court.

The provincial government of Goa had renewed mining leases of 89 mines since operations were halted in 2012 on orders of the Supreme Court for widespread violations of mining laws and illegal mining.

However, environmental clearances were granted to the first batch of 57 mines as they were among the ones that had approved environment clearances from federal authorities, the official said.

But according to an official with Goa Mineral Ore Exporters’ Association (GMOEA), while the pollution clearance and the last hurdle towards resumption of mining operations in the province was cleared, it had come during an adverse business environment when international iron-ore prices were in free fall and there were no international buyers for the raw material.

He said that Goa iron-ore fines were predominantly of lower grade (with an iron content 58% and lower) and bulk shipped overseas as blast furnaces of local steel mills were not equipped to use such low grade fines.

Several traders said that the local authorities had held six rounds of e-auctions to sell iron-ore stock lying idle at pitheads which had been mined prior to the apex court ban on mining in 2012.

But with Indian offers for high-grade iron-ore fines (an iron content 63.5% and above) crashing to a low of $45/t CFR China last week, and thereafter recovering to around $49/t, 5.62-million tonnes of the raw material sold through the auctions had not been lifted by successful bidders at the e-auction and was lying at various stockyards and ports.

Around 16-million tonnes of old iron-ore fines stock was lying idle across pitheads, and the provincial government had sold around 5.64-million tonnes through six rounds of e-auctions, and only marginal quantities were lifted by local steel mills located in the southern Indian province of Karnataka, which did not have captive mines and were among the few capable of using low grade fines.

According to GMOEA, with most the regulatory issues settled, iron-ore mining in Goa could have resumed after the current monsoon season around October when roads and logistics improved after the rains.

But with no takers for existing stocks and current export offer levels which did not ensure any positive margins from export shipments, fresh production seemed a distant possibility unless export offers bounced back to within a range of $55/t to $60/t, a trader said.