Steelmakers in Orissa and Gujarat have started importing iron ore. This is ironical, because Orissa is India's largest producer of iron ore and fortunes have been made exporting the stuff to places like China.
However, since 2010-11, production has been dented across Orissa, Karnataka, Goa and Jharkhand, with only Chhattisgarh showing some growth in mining ore up to 2011-12.
Indeed, between 2010-11 and 2011-12, India's total production of ore slumped more than 18% and unless governments at the Centre and different states take some tough measures, production might slump further and India might have to import more to keep its foundries running.
It is up to the Centre to legislate the new mining Bill, which has been pending for nearly three years. The Bill clears the clutter around the complex system of permits that govern reconnaissance, exploration and mining, and attempts to replace the first-in-queue system with transparent auctions for all new mine allocations.
A system of sharing royalties with local populations affected by mining is intended to take care of the grievances of people in mining areas, prone to Maoist insurgencies.
Mining is a complex subject because it overlaps with concerns about the environment, forest rights, the condition of tribal populations and the contentious issue of land acquisition.
Maintaining and enforcing the law is important, so that powerful vested interests like the Reddy brothers of Bellary cannot capture the state and run it as a mining fiefdom. State governments, which are directly responsible for many of these matters, must, therefore, play a big role to reform mining.
Without such reforms, there is the possibility of widespread popular anger against the activities of miners. Popular anger in Karnataka finally forced a dithering state to act against the Reddys. The court stepped in to ban exports from that state.
In Goa, environmental activism has led to a slowdown in mining. The Orissa government claims its efforts to crack down on illegal mining have led to the drop in production. If backed by reforms, the new mining law and political will, this churn could be positive for mining in the long term.