KOLKATA (miningweekly.com) - The ban on iron-ore mining in the western Indian province of Goa might have been lifted but the resumption of mining operations to any significant volume was unlikely in the current environment of falling prices and the Indian government’s refusal to lower export taxes.

According to an official of the Goa Mining Association (GMA), a representative body of miners in the province, with international iron-ore prices at a five-and-a-half year low, current offers from buyers did not ensure any margins for miners post the taxes and levies payable to the government.

He pointed out that at the time the government imposed the 30% export tax in 2011, the international price of iron-ore averaged around $190/t, but that even after prices crashed to a new low, the government had declined all petitions for lowering of the tax.

It was also pointed out that the ore mined in Goa was of inferior quality with an iron content not exceeding 53%, and since the raw material was not suitable for local steel mills, the entire mining industry in Goa was export dependent.

At a time when international offers for Indian iron-ore, with an iron content of 63.5% and above, did not exceed $64/t to $65/t, the low-grade ore largely mined in Goa was priced at between $35/t and $45/t.

The miners claimed that of the total sale price, half the realisations were paid as various taxes and levies, including 15% royalty and 10% towards the Goa Permanent Ore Fund, created under the verdict of the Supreme Court.

Earlier this month, the Goa government lifted a ban on iron-ore mining in the region as the first step towards resumption of mining operations. However, a matching order was still being awaited from federal Environment and Forest Ministry.

The Supreme Court in April 2014 lifted the ban order but the mining ban remained in place since the local government had not completed finalisation of the new mining policy, which would govern the fresh granting of mining leases.

Since then, the local government had renewed 87 mining leases, but according to miners represented by the GMA, small- and medium-scale miners were unlikely to rush into resuming operations in current international and local environment as the export-dependent miners could not afford the cost of high stockpiles at pitheads.