Panaji, Jun 29 (PTI): The Goa Government will auction the low grade ore piled up in its properties over last several decades causing environmental hazards, a senior official said today.

The new Goa Minerals (Prevention of Illegal Mining Transportation and Storage) Rules, 2012 will amend the laws to empower the State Government to sell the iron ore dumps, which are usually of low-grade, lying in the government-owned lands.

The Principal Secretary (Mines), Mr R.K. Verma, confirmed that the policy would be framed by mid-July but refused to divulge the details.

He said the draft policy would be put up for public scrutiny before it takes final shape. The new rules, which will be ready within three weeks, will repeal and replace the 2004 rules, sources said.

The heaps of ore are sometimes washed away during rains thereby polluting the nearby water bodies, a senior official said.

Goa has 750 million tonnes of ore in the form of rejects scattered across the state. The ore, which had no buyers, has suddenly got the value after demand from China increased since 2005. These rejects are usually used to blend with the high grade ore.

The State Government has imposed a ban on handling these dumps since September 2011, to control the illegally extracted ore, which was funnelled under the guise of moving the dumps.

The State Mines and Geology Department has already begun an exercise to identify the quantum of dumps, which are initially estimated to have been storing 750 million tonnes of ore.

The Chief Minister, Mr Manohar Parrikar, has insisted that even if someone stakes claim on the dumps in the government property, he should be fined exorbitantly before allowing him to lift the ore, the sources said.