I wrote last fortnight about how mining in Goa for iron ore was ripping its forests and devastating its people. I wrote of the violence and protests I saw in its villages, where miners were pitted against people angry at the loss of their cultivable lands and their water bodies. I had asked then: what are we doing? I ask this again.

The fact is that Chinese demand for iron ore has increased its price from us $14 per tonne to us $60. This has spurred a black gold rush - mining companies are bidding for areas that were either closed or not opened because they were unprofitable or unviable. In many cases, these mines had not been worked because they were close to villages and companies knew that people would probably protest. Now none of this matters. The industry says this is boom time - the Chinese are willing to buy low-grade ore, which Goa has aplenty. The Chinese want this ore, as they will blend it with better quality ore. And their appetite is massive.

Goan industrialists are not asking questions. They are desperate for windfall profits. In January 2007, China imported roughly 36 million tonnes of iron ore, of which India supplied nearly 7 million tonnes. But more importantly, India's exports to China were up 18 per cent - with Goa at the head of the supply line. In the past six years, Goa's mineral exports have increased 35 per cent to 23 million tonnes last year.

But what is clear is that this Chinese connection is costing Goa big time. While mining companies are making record profits, as evident from their stock prices or balance sheets, the villagers in whose backyards the mines are being dug are devastated. According to official estimates, roughly 430 leases for mines have been granted in the state. History is important as most of these were concessions granted by the Portuguese and were converted into leases by independent India. But importantly, in 1998, only 99 leases were being worked. Now with the black rush, the leases, which were dormant, furiously opened and worked.

It is important to understand what this means for villages. If all the leases are worked, then over 8.5 per cent of Goa's land area would be under mines. Surely, industry argues, that is a small price to pay. But this is an erroneous calculation. The fact is that mining is concentrated in some villages - their entire land will be swallowed up by mines. An application filed under the Right to Information Act reveals that in these villages large areas have been listed as leases - in Colomba village, for instance, almost 1,500 ha of land may be mined, out of the village's 1,900 odd ha. This is the case in village after village, where, as I wrote last fortnight, I saw land and livelihoods being destroyed. And I saw angry people and tense miners.

The boom has other costs as well. These minerals are moved across the state in barges and in trucks, over village roads and rivers. Here also people lose, and the environment suffers. In Rivona village I visited, people had blocked miner's trucks. They were furious because the truck moved through their village road, leading to pollution and congestion. The children could not cross the local road anymore, villagers said. The red dust the vehicles threw up covered their fields, they added. Roughly 33 million tonnes of minerals transited through the state last year - as Karnataka also sends its minerals through this state. That would mean that 3.3 million trips were made - over 7,000 trucks each day travelled on the roads meant for people. Just imagine what this will do to people's daily lives.

But why are we cribbing, you may ask? Surely, the regulatory processes - environment impact assessments (eias) and the mandatory forest clearances should take care of these concerns. The problem is that while public hearings - to listen to local people - are mandatory under eia rules, actually heeding what people say is not. Therefore, even when people have rejected mines in public hearings, the Union ministry of environment and forests in Delhi has cleared them.

Then, in Goa, large areas of forests are not classified in government records. These are private forests or community lands, so forest clearance is not necessary to cut them down. So what if local watersheds disappear, taking with them the sources of water for villagers?

Industry has its own ways of 'persuading' local people. Everywhere I went, I heard tales of corruption and nepotism. The best tool seemed to be for local leaders - often panchayat heads - to first take people's concern to the miners and then use this opposition to get lucrative contracts. The best going deal is in transportation. In all this, the local politician has been reduced to nothing more than a middleman - a pimp for the miners to milk.

It is clear that the stakes are high. Today, even if we assume prices of iron ore at us $50 per tonne, mining companies in Goa would have made a neat us $1.15 billion last year - roughly Rs 5,175 crore. All the miners pay to the state is royalty, calculated on each tonne mined. Even if we assume the highest rate of royalty, the state government would have earned us $5 million - Rs 24 crore or just peanuts if we compare to the loot that private companies are raking in. Clearly, there is no public benefit in this business. Only costs.

But this cannot go on. This development is piggy-backing the poor and their environment. People will not take it. I believe Goa will have to decide. It can sell itself cheap on the Chinese market. Or it can restrain its mining to certain areas, make profits and share the benefits with its people. This is a make or break situation. Let us be clear about it.

- Sunita Narain