Mining Overview

Mining is a contentious subject. It generates almost as many viewpoints and positions as the number of its contestants. It is, unarguably, a core industrial sector and crucial for India’s economic growth. It is growing at a rapid pace – between 1993 and 2005, the mining sector showed a compound annual growth rate of 10.7 per cent. It is likely to grow at a much faster rate in coming years. Post-liberalisation, mining is being done not only to satisfy India’s domestic requirements, but also to meet the growing international demand. China, in particular, has emerged as a major market for Indian minerals.

On the flip side, the sector’s ecological and social footprints are gigantic, to say the least. Mining ravages the land almost beyond repair, pollutes air and water, uproots people and communities, and leads to enormous loss of livelihoods. Marginalised and impoverished tribal communities, on whose resource-rich lands the maximum number of minerals are unfortunately found, are the worst hit: dispossessed from their lands and their forests, their survival is put at stake. Discontent is the natural corollary of all this -- communities in mining regions across India are erupting in protest against the depredations of the sector.


Economic gain vs social and environmental loss: these are diametrically opposing aspects. They necessitate a serious rethink of the policies that govern mining in India today. Our own inability to resolve the conflicting challenges that the mining sector is faced with has fuelled the opposition against mining projects. This Dialogue offers a platform for constructive discussions on the various issues and concerns that govern mining; the aim, of course, is to arrive at a consensus on resolving these challenges.



Mining and environment

Mining is a temporary land use and economic activity, but there is nothing temporary or small-scale about its impacts. The sector exercises long-lasting environmental impacts throughout its lifecycle – during prospecting and exploration, while opening and operating the mines, while transporting minerals and ores, during closure of mines, and even after the closure. Unless it is meticulously planned and thoughtfully executed, mining can destroy land and all the resources that it holds, and degrade the quality of life of people who work and live in the area.


A substantial portion of India’s mineral wealth is located under the country’s forests. Many of these mineral-bearing areas are also the watersheds of our major rivers – especially in the central and eastern parts of the country. What’s at stake, therefore, is not just our forests, but also our water sources. There is a dire need, thus, to debate on where we can mine and where we cannot.

The lack of effective regulations compounds the problem. Mining is one of the very few sectors where environmental regulations have not been codified in detail. While India has regulations governing waste management, air and water pollution or mine closure, there is enough ambiguity in each of these to prevent them from having sufficient teeth. Regulations on diversion of forests, protected areas and ecologically sensitive regions suffer from a similar fate. While mining is making inroads into these areas, forest clearances have been reduced simply to making payments for compensatory afforestation. Environmental impact assessments (EIAs) are nothing but paperwork and a legal necessity. Even the capacity of institutions to implement regulations is suspect: most state pollution control boards do not have sufficient humanpower and techno-legal capacity to enforce regulations.

In developing countries like India, mining’s impact on environment has direct and organic links with people’s livelihoods. It is, thus, absolutely imperative to charter a way ahead to address the environmental impacts of mining.


Social and economic impacts

The other key imperative is the impact mining exercises over society and economics. Is mining increasing poverty? Most people in India’s mineral-rich states say so, and macro-statistics support this contention. States like Jharkhand, Chhattisgarh and Orissa, having a high level of dependence on mineral resources, exhibit lower per capita incomes, greater poverty, lower growth rates and higher levels of mortality, malnutrition and morbidity. District-level analysis bears out this assertion. The mineral-rich districts of the country are also some of the poorest and most underdeveloped in India. Keonjhar, which produces one-fifth of India’s iron ore, is ranked 24th out of the 30 districts of Orissa in the Human Development Index (HDI). Gulbarga, the largest limestone producer in India, is second last in Karnataka in HDI. Koraput, which produces more than 40 per cent of the nation’s bauxite, ranks 27th out of Orissa’s 30 districts in HDI.

Mining’s perpetration of poverty instead of prosperity has a lot to do with the lack of policies and systems for distributing the benefits of mining and the way land acquisition, resettlement and rehabilitation have been managed over the years.

The performance of India’s major mineral-bearing states in managing land acquisition and displacement can be summed up in one word: dismal. People deprived of their land 50 years ago due to mining are still waiting for their compensation. Some have been displaced more than once. Existing resettlement and rehabilitation (R&R) policies in the country do not recognise the right of the people to say ‘no’ to a project. They do not acknowledge the land-for-land principle; nor do they believe in sharing the benefits of a project with the project-affected people. Not only is compensation fixed arbitrarily (under-financing of R&R is a chronic problem), almost no effort is made towards restoration of incomes and income-earning opportunities of the affected people. Numerous case studies suggest that the majority who have been displaced, now find themselves worse off.


Globally, it is now recognised that the wealth generated by mining comes at a substantial development cost along with environmental damages and economic exclusion of the marginalised. This has led to a new thinking about ways in which mineral wealth can be converted into sustainable development benefits for local communities. Most of these new approaches are built around a framework in which compensation, benefit-sharing, community development and social and economic reconstruction after mine closure are the key aspects. The assumption is simple: wealth generated by mining is not for companies and governments alone -- places and people affected by mining must share its benefits.

It is important to recognise that if impoverishment is the expected outcome of displacement, people will resist it – and justifiably so. The challenge, therefore, is to ensure ways in which mining can create prosperity and alternative livelihoods.