The Goa Foundation has said that Rs 717 cr will again go down the drain on mining front.
It said that the Supreme Court, on 13.10.2020, passed an order permitting a few miners additional time till January 31, 2021 for transporting ore extracted before March 15, 2018.
The Goa Foundation put up a strong protest during the hearings, arguing that the ore, after the statutory period of 6 months calculated from 30.1.2020), now belonged to the Goa government and to the people of the State.
“In all likelihood, we (the people of the state of Goa) all lose Rs.717 crores as a result of the order. Here’s how – The Chief Minister has publicly stated that around 4 million tonnes of ore would become eligible for payment of royalty and transport for sale by a few miners who had appealed their case before the Supreme Court and on whose applications the Court passed its order dated 13.10.2020, with Goa Foundation objecting,” it explained.
Further it said, the Prices of iron ore have risen in the international export market. For the calculations below, we are assuming that all the 4 million tons are of average 54% Fe content.
“If we assume mine pit head price of $35 / ton, or Rs. 2,555 / ton (using an exchange rate of Rs. 73 / USD, 35 x 73), the following scenario emerges: If the state had auctioned off all 4 mt (which was the Goa Foundation’s position in the apex court) it would have receive Rs. 1,022 crore (4 million tons x Rs. 2,555 / ton) at today’s prices,” it says.
Goa Foundation says from this amount, it would have had to set aside Rs. 151 crore (GIOPF – Rs. 102 crore, DMF – Rs. 46 crore, NMET – Rs. 3 crore). So the State of Goa would have received Rs. 871 crore from auction of this 4 million tonnes.
“Instead, as the State has eagerly handed over the minerals without a fight to its friends and cronies in the mining industry, it will only receive royalty of Rs. 153 crore (15% of Rs. 1,022 crore) from the disposal of the 4 million tonnes. Loss to Goans, and Goa’s exechequer which is a gift to illegal miners: Rs. 717 crore (Rs. 871 crore – Rs. 153 crore),” the foundation says.
It isays it s important to recall that the State is selling securities every month worth Rs.100 crores to pay salaries of its staff. The rental/interest on this amount is being paid by the Goan public in the form of enhanced taxes and rates.
“Even if we assume a lower pithead price of $30 per ton (instead of $35), the Goan public loses badly. If Goa govt auctioned the ore at that price, it would have received Rs.876 crores. After paying dues, it would have received Rs.746 crore from the auction,” it remarks.
Instead, it explains further, the state would now receive royalty of Rs. 131 crore (15% of Rs. 876 crore).
“Loss to Goans and Goa’s exechequer which is a gift to illegal miners: Rs. 615 crore (Rs. 746 crore – Rs. 131 crore). Obviously, the government of the State of Goa does not understand either business or economics. Apparently, it does not care either,” it says.