Supreme Court panel recommends scrapping Goa iron ore leases

NEW DELHI/MUMBAI (Reuters) - A panel appointed by the Supreme Court has recommended scrapping 42 iron ore mining leases in Goa until mining companies submit plans to deal with the environmental impact and legal details involved, a lawyer who attended the hearings said.

A temporary mining ban, imposed from early October, has cut local production and crimped exports, opening up new markets for world miners such as Vale (VALE5.SA), Rio Tinto (RIO.AX) (RIO.L) and BHP Billiton (BHP.AX) (BLT.L).

The court imposed a ban in Goa from early October after allegations of illegal mining from a government-appointed committee. It followed a similar ban in neighbouring Karnataka the previous year.

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“The Supreme Court committee has directed scrapping 42 mining leases in the region of Goa and said that all things should be in accordance to law,” lawyer Sandeep Singh said.

The Centrally Empowered Committee, whose recommendations have been accepted by the Supreme Court so far in Karnataka, has also suggested that the court ask miners to demarcate their lease areas properly.

The court hearing has been adjourned to January 8.

“It will hamper the re-start of mining in Goa soon … India will become an insignificant player in the international market,” H.C. Daga, president of the Federation of Indian Mineral Industries, said.

Before the ban, Goa was India’s third-biggest producer of iron ore and its top exporter, producing more than 50 million tonnes annually and exporting almost all of it.

In Karnataka, India’s second-biggest producer of iron ore, the top court allowed 18 mines to restart operations in early September, which was expected to add 5 million tonnes of output per year to the National Minerals Development Corporation’s (NMDC.NS) 12 million tonnes.

(Editing by Jane Baird)