Two persons were arrested by the Bicholim police on charges of damaging trucks that were transporting e-auctioned iron ore. This is the second incident involving trucks ferrying ore to the jetty point. These two incidents point to the problems associated with restarting an industry that closed down nearly three years ago following State, Central and Supreme Court orders. At the heart of the problem lies the issue of money. The rates for transporting e-auctioned ore were fixed at Rs 12.33 per tonne per kilometer by the government after some hard bargaining. The truckers had demanded Rs 17.50 but had agreed to the lesser sum. They now allege that mining company officials are reducing the distance travelled to save money. The industry maintains that the rate, although on the higher side, should be adhered to. The demand for a higher rate is dependent on truckers sticking together to put pressure on mining companies.
This tactic would have worked in an industrial sector that was up and running, not in one that is trying to get the wheels rolling after a three year hiatus. Times have changed since 2012 and the international price of iron ore has taken a huge plunge. Profit margins have been crunched and a re-start seems more like a false start. On one side the industry is facing low selling rate and on the other, a hostile environment created by truckers who refuse to accept that the heydays of mining are behind us all.
Chief Minister Laxmikant Parsekar is desperate to re-start mining for two reasons. First, his government is woefully short on tax collections and his government has been borrowing from the market at Rs 2,000 crore per year. An influx of revenue from the mining industry will be like an IV drip to the State's balance sheet. Second, the government has succeeded in capping the surge of resentment in the interiors by doling out cash to those affected by the ban on mining. Resumption of mining will take away the second headache which is draining the exchequer. Now the only barriers that stand in the way of a restart is the demand by truckers and low international prices.
Unlike in the past when mining companies were virtually exporting close to 50 million tonnes per annum, the Supreme Court has capped the extraction of iron ore at 20 million tonnes per year. This means there are too many trucks chasing too little ore. This will result in a reduction of trips and even though the earning per trip might go up, the total income might not be as rewarding as in the past. Truckers want a higher return unmindful of the fact that the rate cannot be fixed arbitrarily, but is dependent on the international price of ore as well.
The issue here is about sharing the pie. It is easy to share a large pie. That situation no longer exists. The slices have become thinner, resulting in angst and heartburn. A reasonable rate must be fixed, but once it is fixed then all parties to the bargain must adhere to it or resumption of iron ore export will fail even before it starts.
