Monday, October 25, 2010

India's Mining Sector: Sustainable?

Mining as a profession has been a part of the economy since Harrapan civilization. In the changing economic scenario where revival of primary industrial sector is in tune with the theme of sustainable development and environmental protection, mining sector cannot be left behind.

India produces as many as 86 minerals, which include 4 fuels, 10 metallic, and 46 non-metallic, 3 atomic and 23 minor minerals. The Ministry of Mines is responsible for all except atomic mineral, fuels and coal.

The resurgence of the sector can be attributed to higher demands in national and international market especially from rising economies of east and south-east Asia in the early 1990’s.
The high demand led to scrambled, dig-sell mining practices in India which resulted in appearance of illegal mines over-night all under the nose of government of the day. The 'first come first serve' policy of leasing mines remained the major way of contracting out mines to private ownerships by the ministry. The lack of transparency in the process thus led to rise of mining mafia and other unscrupulous new entrants in the sector with political support.
Although late but government realized that the sector is the golden goose and there is an urgent need to regulate and organize the sector.

The Mines and Minerals (Development and Regulation) Act, 1957 (MMDRA), was majorly insufficient to realize the vision of economic growth as mines in poverty stricken regions showed no sign of development. The present status remains more or less the same or even worse as labor rights and regulation are absent. More over as a result, a system of bonded labor has cropped up and the poor miners; mostly local tribal people are unaware and even helpless to voice their concern.

Looking at the major roadblocks which need reforms are:-
Firstly, mining as an occupation is done in the most inhuman way where the miners risk there lives for a meager sum of money whereas the minerals worth is much beyond imagination.
Secondly, the mining activity is directly proportional to demand and thus non-scientific practices and ill-mannered mining and absence of training to miners are an issue at large.
The recent rescue operation of 33 miners in Chile has bought the world's attention towards these unsung heroes .The national responsibility for these risk taking occupation are the next major issue in mining policy world over.
Thirdly, Land ownership and mass migration becomes a major concern in addressing rehabilitation issues.
Fourthly, the FDI entrants like MNCs find it very difficult to operate leading to uncooperative attitude of locals, governments, media etc. The recent global showdown against Vedanta’s Niyamgiri Hills in Orissa which are opposed by tribal inhabitants for community principles can be a set back for MNCs interested to enter in the sector.
Fifthly, today when environment is major concern there is conflict of miners and environment regulation where due to environmental concern or emerging 'green tape-ism',  activities are shut down leading to unemployment of miners and loss of investors.
Sixthly, mining activity are scientifically done world over and use of advance geological instrumentation in the process has resulted increased production in a sustainable way. Such practices are yet to be implemented on field in India.
Finally, corruption is a cancer which infects all organizations. It leads to non-transparency, delay and vindictive attitudes of the official, which is primarily responsible for non-acceptance of reforms in practice.
At the policy front government has time and again proved its meticulous ability to lay a framework projecting a simple strategy.

The New Mineral Policy 2008 and Sustainable Development Framework 2010 enunciates measures like assured right to next stage mineral concession, transferability of mineral concessions and transparency in allotment of concessions, in order to reduce delays which are seen as impediments to investment and technology flows in the mining sector in India.

But the problem lies in the implementation of the policies.

Some innovative approaches which can be considered for real reforms in mining sector are:

Firstly, inclusion of local governance system with sufficient powers to work with PSUs or MNCs.

Secondly, when the conflict is of environment/ biodiversity Vs Ores the priority should be for environment as to maintain the natural balance. The ores can be left for future use if ever required but as in India major ores are mostly in biodiversity zone; identification of area, mapping through satellite and inclusion of advance geological instrumentations, such practices can help to chalk out action plan for identifying major mining zone and their transport routes.

Thirdly, PSUs and MNCs acquiring mines for projects should act under Corporate Social Responsibility with government support to provide full benefit to locals and affected population in the way to compensate for their loss. Health, education, training and employment issues can be addressed in better way by them.

Fourthly, Instead of selling out mines, renting out approach to address ownership issues of the Persons Affected by Projects (PAPs) adopted so as to ensure at least regular sum of money in case they are either unwilling to be employed or where compensations cannot address their future.

Finally, Government and other regulatory bodies should periodically assess the progress to provide timely assistance if any in policy reforms or action thereafter so as to organize and follow a strict local approach to address this global industry. A tribunal or judicial arrangement can also be framed for exclusive issues pertaining to this and related sectors. Thus a resurgent sector can fruitfully implement a progressive change in India.

The opinions expressed are purely observational and author’s analysis of the issue.
Abhilash Mohapatra not only thinks about India, but he is damn serious to contribute fruitfully in future.

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