16December2017

Goa's Spirited Online Weekly Magazine.

Mackenna's Gold

This ore is our ore 

The Dempos sold over 1,800 hectares of leased mining licenses to Anil Agarwal’s Vedanta Resources for a cash-and-carry sum of Rs 1,750 crore. But, hang on, did they actually own the ore on the land they owned, notwithstanding the fact no individual can own mineral rights in India?

The distressing answer is a huge ‘NO’. Why? Because mineral wealth is the nation’s wealth -not for individuals to exploit for their personal benefit. The U.S is the only country on the planet that allows individuals to own mineral rights. And we all know what those merry band of individuals, who not only own minerals, also everything above and below earth, did to the worlds’ economy. Through a rather cunning exploitative route, the Government of India was thwarted in its plans to nationalize the mines in Goa decades ago –the compromise was the mining leases you have in Goa today. What the Government of India did was annul the concessions given by the Portuguese for perpetuity and came out with The Goa, Daman and Diu Mining Concessions (Aboliton and Declaration as Mining Leases) Act, 1987. So, while everyone applauded, the deal of the century (Dempo-Vedanta) was played out making maximium use of Goa’s red soil.

Surface Rights or Mineral Rights?

If you calculate the quantity of ore that has been dug out from the earth and sold to the Japanese alone, it would give you sleepless night thinking of what the worth of that could have done for Goa. Macau would look like a poor man’s Shangri La. Here’s a bit of information that should at least make you want to pull your hair out, so you can sleep at least. Sesa Goa’s lineage has been transformed since 1954 when it kicked off as Scambi Economi SA, Goa. The following year it was jointly renamed Sesa Goa Ltd. After it was jointly taken over by Gewerkeschaft Exploration, West Germany, and Ferromin SpA, Italy, a subsidiary of Finsider SpA, belonging to the IRI group –which by then had acquired the German company’s stake in Sesa. Mingoa Pvt. Ltd and Sesa Goa were merged into one company.

Later, in the course of restructuring of certain subsidiaries within the IRI group, Sesa Goa’s ownership changed from Finsider SpA to Finsider International SA, Luxembourg, and then to Finsider International, UK. Phew! Looks like a soccer game, the way they kick around (on) Goa’s scarred red soil. In 1981, Finsider divested 60 per cent of its shareholding to the Indian public. It hiked it again under its new name Ilva International, from 40 per cent to 51 per cent in 1993 –now under the RILP umbrella. Now, tell me what stops Vedanta from selling the combined might of their mines to China’s Chinalco who were willing to offer a $19.5-billion-cash injection in favour of a joint venture in Western Australia with bitter rival BHP Billiton, just to keep out another rival Rio Tinto. It’s a long story, but what needs to be understood here, is when rare earth gets rarer $19.5 billion becomes peanuts. That’s why the US is willing to fight a trillion dollar war in Iraq to gain control over crude oil that costs far, far less to refine closer to home. And may I remind you that Rs 1,750 crore would mean chickens*#t, considering the low rupee value against the dollar, and no deterrent to future buyers like the Chinese going on an acquisition spree.

 

Jogging your memory

When I interviewed Emilio Riva who owned RILP in 1995 for a national business daily, in Sesa Ghor, it was crystal clear to me, that he had no intention of retaining ownership of the Sesa Goa he had just acquired. Though he denied it at the interview, he soon sold it to Mitsui who appeared to have the same itch to sell as all Sesa Goa owners inherently have; and sold it to Vedanta. The Italian billionaire had at that point of time acquired Ilva Laminati Piani SpA, Italy (ILP) the holding company of Finsider International Co. Ltd., U.K., which was Sesa Goa’s principal shareholder then. The Riva Group rose from 25th position to become the world’s fourth largest steel producer after it acquired ILP. See, it’s all about power, wealth and screw the rest. Incidentally, the Essar Group also had a 32 per cent stake in RILP!

 

PS: My apologies if the 2-Fast-2-Furious pace of describing how Sesa Goa was sold over the years made you tizzy. But within this restricted June 11, 2009 space I couldn’t do any better.

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