Goa Chief Minister’s iron ore mining scam

Goa Chief Minister’s iron ore mining scam

The Indian state of Goa has been hit by revelations of unauthorized iron ore mining, with claims that at least one third of all exports of the mineral last year were extracted illegally. The alleged fraud, detailed in a report implicating senior politicians, police, government officials and the mining lobby, is thought to have cost the local economy 40 billion rupees ($800 million) in the last five years.

Some 18 to 20 million tonnes of the record total 54 million tonnes exported in the last financial year was illegally mined, according to the committee, which said there had been breaches in nearly half of all mining licences.

The illegally exported ore is estimated to have been worth 11 billion rupees while the unpaid duty totalled some 1.2 billion rupees.

Goa chief minister Digambar Kamat's ruling Congress party have rubbished the widely leaked report, claiming it is biased because the committee chairman also leads the main opposition Bharatiya Janata Party (BJP).

Kamat has denied any wrongdoing and told the assembly last week: "Ultimately the truth will prevail because there are records to support it. We have not exceeded the environment clearance limits."

But those dependent on mining fear for their livelihoods. The total economy of the state would collapse if the mining industry is stopped. Mining is Goa's second-largest industry and the biggest employer after tourism, employing 75,000 people directly and in related services, particularly transport. Nearly half of India's total iron ore exports come from Goa.

Demand for the low-grade mineral found inland from Goa's famous beaches took off in 2005, with fast-growing China a major recipient alongside steel-producing countries such as Japan and South Korea. About 10 billion rupees a year are paid in royalties by companies mining government-owned land in Goa, while export duties contribute 40 billion rupees annually to the exchequer. The public accounts committee is calling for the federal Central Bureau of Investigation to probe the alleged fraud.