Goa suspends all mining activities temporarily

A trader sits inside his shop at a wholesale iron market in Kolkata July 15, 2010.

MUMBAI (Reuters) - Goa has temporarily suspended all mining activities, effective Tuesday, after an expert panel formed by the central government found "serious illegalities and irregularities" in mining operations, the state government said in a statement late on Monday.

Goa has not banned movement of iron ore already produced and stored at ports or in transit, the statement said. The state will form a verification and clearance committee to scrutinize operations before giving approval to resume mining, R K Verma, principal secretary at mines and geology, said in a statement.

Goa is India's second-biggest iron ore producer. It produces more than 50 million tonnes of iron ore annually and exports almost all of it, making it the top exporter. Sesa Goa Ltd (SESA.NS), an Indian unit of London-listed Vedanta Resources Plc (VED.L), gets most of its iron ore from mines based in Goa.

The mining-suspension order came a week after the Supreme Court partially allowed mining in the neighbouring Karnataka following a ban of more than a year.

India used to be the world's No. 3 iron ore exporter, with most of its product heading to China. But a clampdown on illegal mining in 2010, and New Delhi's measures to keep output for domestic steel mills, slashed exports in half.

(Reporting by Siddesh Mayenkar and Rajendra Jadhav; editing by John Wallace)