The boom and bust saga of iron ore mining in India is slowly coming to an end with

mining restrictions already extensively lifted in Karnataka and now partially in Goa.

The global boom in the early 2000s and the near-insatiable Chinese demand for steel

and its raw materials in the run-up to the Beijing Olympics of 2008 brought about an

iron ore mining boom in India, much of which was illegal. The environment, public

health and infrastructure such has roads suffered seriously, not to speak of

governments losing thousansds of crores of potential revenue.

Such quick generation of big money had to affect politics - the rise and fall of

ministries in Karnataka after 2004 can be traced to their making and unmaking by

the newly emerged mining czars. Inevitably, public interest litigation was launched,

the Justice M B Shah commission of inquiry was appointed, and state governments

and the Supreme Court put a stop to iron ore shipment and mining in Karnataka and

Goa (Odisha took partial action) a couple of years ago. An empowered committee

from the Centre was asked to go into the irregularities and outline a path for

journeying back to normal life.

During this period of disruption, the economy suffered. India, known for its rich

deposits of high-grade iron ore (which gives its steel industry a global competitive

advantage), became a net importer of iron ore. Its exports over a four-year period

fell from 117 million tonnes in 2009-10 to around 15 million tonnes in 2013-14.

(There is a subplot to this, regarding the imposition of a 30 per cent export duty on

iron ore pellets through lobbying by the steel industry, but that is another story.) The

railways, which first made hay (higher freight revenue) when the sun shone, took a

hit later by losing a lot of freight tonnage.

This whole cycle has also had bigger political fallout. Through the boom years - the

boom was partially fuelled by illegal and harmful iron ore extraction - the first United

Progressive Alliance (UPA) government was the toast of liberal economists and the

business media for uncaging the Indian tiger. Then, when the ban on iron ore mining

was imposed, the second UPA government was in the doghouse for policy paralysis,

which led to severe economic slowdown - fuelled in part by the non-existent iron ore.

(The index of industrial production, which includes mining and quarrying,

floundered.)

Some of the conditions laid down by the Supreme Court while allowing resumption of

mining in Goa are instructive. It placed a cap of 20 million tonnes per annum on

output, less than half of the pre-ban output, on the basis of the finding by an expert

committee that evaluated the impact of mining. No mining leases will be granted

within a kilometre of national parks and wildlife sanctuaries.