India is a major minerals producer across chromite, coal, iron ore, bauxite and zinc. India’s mining sector comprises large and small mines, with public players dominating (72 per cent by value produced, 92 per cent in coal, 31 per cent in iron ore). The industry remains significantly fragmented — there are over 573 coal, 553 metallic and 1,523 non-metallic mines — with fuel minerals like coal dominating (67 per cent). India’s resources remain substantial on paper — over 26 billion tonnes of iron, at a grade cut-off of 55 per cent — and it ranks as the fourth-largest producer of iron ore in the world. Greater than 280 BT of coal remains to be mined, while the demand-supply gap continues to rise with demand growing over six per cent per annum, driven primarily by power generation which makes 70 per cent of the total demand.
The National Mineral Policy of 2008, the Mines Act of 1952 and the Mines & Minerals (Development & Regulation) Act of 1957, along with concomitant state laws, have created regulatory instruments that are laxly enforced, with poor coordination amidst bureaucratic intermediaries, resulting in poor performance and illegal mining. Political interference and institutional corruption are rife, keeping production low and accountability limited, which leaves the needs of the local communities and the environmental unmet.
Mineral resource extraction is bedevilled by a duality of control. Constitutional arrangements restrict the proprietary title of onshore minerals to the states while keeping regulatory powers with the Centre. Many state and Central agencies are poorly funded and have an overlap of enforcement duties. This results in production shortfalls and industrial logjam.
Consider illegal mining in Orissa. In 2011, the state government complained to the Centre over Indian Bureau of Mines’ inadequacy in preventing illegal iron ore mining (through overproduction) in the state. IBM contended that checking illegal mining is a state responsibility under the Orissa Minerals Rules, 2007. The Centre, meanwhile, asserted that a 20 per cent overproduction was permissible. Meanwhile, illegal mining continues with over 15,534 cases in Andhra Pradesh alone in 2010.
To bolster coal production, capacity should be improved through technology upgradation, utilising underground mining over opencast techniques. A significant portion of India’s coal reserves lies at depths below 300 metres — yet, the share of coal derived from underground mining has dropped to 9.6 per cent since the financial year 2012. Underground mining — resilient to monsoonal rain with a lower land and environmental footprint and decreased need for last mile connectivity — should be encouraged. Such practices could be bolstered by utilising underground and opencast safety technologies.
While the government’s robust new auction process should hinder illegal mining, to auction such resources in the right quantities and at the right price and data aggregation is a must. It remains necessary to invest in information systems and radio frequency identification systems — all while enforcing sustainability reporting.
Environmental governance is rife with overlaps — IBM is required to monitor environmental protection measures, while the state pollution control boards consent to establish and operate through an elaborate approval process. Enforcement of the Forest (Conservation) Act, 1980, is the purview of state and Central forest agencies. Violations, however, are required to be reported by the state directorates of mines.
Mining regulation should be effective, enforceable and focused towards environmental conservation. Administrative reformation that empowers state agencies for mineral administration, with adequate budgets, could lead to a significant in-field impact. Mineral development needs to be linked to a region’s biodiversity and its environmental carrying capacity, along with tribal concerns (a la Niyamgiri). Mine closure should be legislated, requiring community consultations, legal obligations and rehabilitation packages.
Mining is inherently a “dirty” industry which ravages landscapes and aggregates pollution, and is amenable to kickbacks and illegal operations. The practice of strip mining destroys habitats, wipes out local communities and damages productive soil. Its usage of large tracts of land engenders issues associated with resettlement, compensation and land rights, despite bringing economic and infrastructure development. The Joda block, in Orissa, witnessed a 110 per cent increase in wasteland (from 8,294 hectares in 1989 to 18,540 hectares in 2004). During monsoon, the river waters often turn red due to presence of iron oxide particles with total suspended solids reaching 1000 mg/l. However, a ban on mining is not a viable option, given the need for socio-economic development. This necessitates the utilisation of technological improvements, sustainable development and the “precautionary principle”.
The idea of sustainable development in mining seems paradoxical. While large- and medium-sized mines should ideally utilise scientific mining methods and adopt comprehensive environmental conservation measures, most players prefer to conform to regulatory norms in form rather than substance. Local stakeholder consultation remains highly neglected, with little interaction with local communities (aside from an initial public hearing). While mining firms have setup corporate social responsibility funds, their spending is mostly determined by the mine owners’ priorities. Transparency, accountability and local development remain severely lacking.
We need to consider a holistic view of sustainable development in mining. South Africa’s Social and Labour Plan, Papua New Guinea’s Mineral Development Fund and Canada’s Impact Benefit Agreements, offer pathways to environmentally conscious local development. By including provisions — for mine closure, reclamation and rehabilitation — that are strictly enforced, such countries work towards lessening the deleterious impact of mining on the environment. A mandatory obligation for local development should replace voluntary CSR projects, with funds expensed in accordance with panchayat-determined requirements and execution conducted by mining enterprises instead of semi-government agencies. The idea of a “social license to operate” should be engendered in our approvals process, exposing mining to accountability. Without social consensus mining can be easily disrupted. Simply offering money to villagers will no longer suffice.