Insurance Article, The Insurance Times 2021, The Insurance Times September 2021

RISK ASSOCIATED WITH MINING SECTOR AND ITS MANAGEMENT

With the growth in the world demand and the economic situations, mining industry has also seen major technological and managerial developments. New industrial methods and techniques; also use of skilled workforce are few of such developments. Despite these developments, the mining industry is considered the most uncertain and hazardous industries in the world. Hazards are part of every industry, and use of management tools are very common to counter these hazards; somehow we have failed to properly address the risks associated with mining or underestimated it, leading to loss of life and wealth of the concerned industry.

Underground mining is highly dangerous and strange environment is associated with it, and several factor is responsible for this issue. It is therefore important to create an environment that is safe and secure in all the working conditions ensuring the safety of the workers and the cost associated with it.

            The intent of this paper is to address the risks associated with the mining so that it provides researchers and practitioners the idea of how they can use this knowledge to create a safer work environment within the ambit of Occupational Safety Hazards guidelines. Paper work will identify major risks and its management techniques to assess the hazard in timely manner.

Keywords: Mining, Hazards, Risk Management, Safety.

INTRODUCTION:

            Mining is the extraction of minerals or other geological substances that have some value from the Earth, usually in the form of an Ore. These minerals form a package that is of economic interest to the miner. Mining is required to extract minerals that are not grown through agricultural methods, or feasible to create it artificially in a laboratory or factory.

Before we move ahead with the actual subject matter, we need to know few terms related to the industry:

  • Ore: Rock which contains metal and is economic to mine.
  • Grade: Amount of metal contained per unit ore.
  • Recovery: Amount of metal that can be recovered from the ore after the process of extraction.
  • Production: Metal that is produced and is calculate per year.
  • Cash Costs: Amount that is required to operate mines, mills, labour, energy, consumables. It is calculated in cost per ton of material.

What is Risk? – It is any uncontrolled loss resulting from some foreseen and unforeseen events due to given action or inaction. It can be in the form of Physical, Emotional, Social or Financial.

Are Risk and Hazard Same? – Lot of time where we are considering potentially difficult situations, we use the terms ‘Hazards’ and ‘Risks’. Both are sometimes used interchangeably but are not same when it comes to the safety. Hazard is likely to cause harm, while risk is the possibility of harm when exposed to the hazard.

Hazard can actually cause harm to the stakeholders involved. Whereas, Risk has a chance to cause harm but it’s not definite.

Example: Hazard – Working on heavy machinery, using chemicals, Poor work environment etc.

Risk – Increased stress level, injury or burns etc.

What is Management?–It is the task that involves directing, controlling, planning, organizing an organization or one of the units. It is the technique where the goal is reached by working with and through people with the resources of the organization. It also involves effective utilisation of manpower and financial resources.

Who are insured? – Insurance in the mining sector is a specialised form of insurance. Insurance are generally plans for the individual and the company who when faced with adversity can get some recovery.

Few of the insurance cover can be as follows:

  • Emergency evacuation
  • Disability Income Plans
  • Accident Insurance
  • Travel Insurance
  • Medical Plans
  • Group plans etc.

It is very necessary to insure all the stakeholders involved knowing the risks involved in such a high risk occupation. Even Insurance companies are very keen to give insurance coverage to the sector which is a major contributor to the economy. A slight change in this sector will have impact on many ancillary industries leading to slowdown in the economy of the nation. Hence, it becomes very important to mitigate the risks through proper planning and management with the help of experts.

Which regions are important? – In India, most of the mineral resources are concentrated in the areas of Odisha, Andhra Pradesh, Chhattisgarh, Jharkhand, Madhya Pradesh, and Karnataka.

There are regions which are dominant in particular minerals. For example: Iron ore is found in Odisha, Chhattisgarh, and Jharkhand etc. Manganese is found in Maharashtra, Madhya Pradesh, and Andhra Pradesh etc.

Following date shows the Mineral deposits in India:

Figure 2 – Source: Drishtiias

Figure 3 – Source: Drishtiias

How is the industry regulated? – The mining industry in India is regulated by both the Centre and the State. As per the constitution, the States have the power to regulate the minerals and mines which are subject to Central laws and regulations.

There are two types of minerals – Major and Minor. State governments have the exclusive powers to frame the policy and regulate its exploration, extraction and processing of all the minor minerals (building stones, sand and clay). The minerals which are not covered in the Minor minerals are covered in the Major minerals. The Central government has the power to regulate, make laws and policy regarding the Major minerals in the country.

The Mines and Mineral (Development and Regulation) Act, 1957 (MMDR Act) is the federal law for overall regulation of the sector.

The Mines Act 1952 – for health and safety in the mines and its operations.

Offshore Areas Mineral (Development and Regulation) Act 2002 – Regulates offshore mineral resources.

Mining Regulatory bodies in India:

  • Geological Survey of India
  • Indian Bureau of Mines
  • Controller of Mining Leases
  • Directorate General of Mines Safety

TYPES OF MINING AND METHODS:

Mining is the core sector that is essential for the Indian economy as it almost contributes about 2 – 2.5 percent of country’s GDP and also is important for the growth of other industries like iron and steel, power, cement etc. It is known to all that there are primarily two types of mining: Surface/Opencast and Underground mining. The option to choose the type explicitly depends on the depth, geology, topography, mineral and the cost of labour and mechanisms.

In India, the surface mining is more prevalent as it has low cost of equipment and technology. For Underground mining India is not yet technologically advanced and cannot deploy such heavy machinery without any experience. To get the maximum benefit out of the process, it is very important to choose the type of mining very wisely as the cost and production will depend largely on it. Though much of India’s mineral resources are yet to be fully explored. Government with its public sectors companies stays the largest production and participation unit in the sector.

With growth in the sector of infrastructure and automobiles, there would be rise in the demand of power and steel which in turn boost the investment and the technology in the mining sector. Currently, very small geographical area (0.14% approx.) is under mining lease and 20% of it is actually mined. But, it is estimated that the sector would grow by 7% in the coming years with the growing demand from other sectors.

Let us now discuss in brief about few mining types:

  • Surface Mining: When the top layer of gravel and sand is then and the miner or the deposits of ore are found near the surface. This method is broadly used and is predominant in Indian mining industry. It uses heavy equipment to extract the minerals.

This type of mining is sometimes controversial as it is done closer to the surface of the land, it is said that it leaves behind a large chunk of that land fallow and unsuitable for cultivation.

  • In-Pit Crushing and Conveying: It is also done closer to the surface but for the harder minerals that are difficult to be transported as a single ore. Therefore, the ore is crushed in the mine itself and are then transported using the conveyor belt. It is a gradual method as the mine goes deeper and does not require and form of tunnelling. It can be as deep as 1000 meters. This technique works well in the horizontal movement of mine face and becomes difficult when the mine face goes vertical. It is not even affected much by the bad weather.

Once the mining is complete the pit is covered or filled with sand and clay. The land can take hundreds or thousands years to recover naturally as during the process the soil underneath became acidic. It can be used for recreational or rehabilitation purposes till it can be made available for environmental purposes.

  • Underground Mining: This method of mining is used when the demand for the minerals increase and the open cast mining cannot suffice the demand raised. As the minerals in the deeper part of the earth are of rich quality and the output is more. It includes networks of shafts and tunnels that are dug deep inside the earth’s crust to reach exact site of the deposit ore. This process is very expensive and tiring in nature but the waste rock created is low and hence it is preferred. The percentage or ore recovered depends on safety considerations. The deeper we dig, the less safe the mining becomes. Major issue is of ventilation and oxygen toxicity.
  • In-Situ Mining: Or solution mining. This process is rarely used in mining material as it is quite complex as a process. A solution is pumped into the ore body, dissolving the ore and the dissolved ore is then extracted by the second pump. Mostly in Uranium mining this method is used.
  • Open Cut Mining: This method is used when mineral is found over large area and close to the surface. A pit is dug progressively as per the ore, technical and economic conditions in a step or benches form. Mining continues until the mine becomes too deep, or too expensive or too difficult to manage the method. It sometimes use explosives to break the ores.

When complete the pit is left for the locals to use it as a lake or modified conditions on the consent of the community.

  • Sea Bed Mining: It involves mining of the submerged minerals and deposits from the sea floor. It can be done in the shallow waters or the deep sea. The environmental impacts are yet to be fully proven. They are very different from the methods deployed on the land. Minerals are scooped off the sea floor and then transported through pipes to the vessel.

The choice of the mining method is purely dependent on the geology, topography, relief, the mineral deposit, cost of the equipment and the demand. Moreover, the method used should guarantee mass production.

RISKS AND HAZARDS ASSOCIATED WITH MINING:

Mining industry can present much more dangerous hazards and risks than our regular industrial facility. Mining has been done since ancient times and is always recognized as being arduous and liable to injury and diseases. Mining is usually a long process, hence the exposure to these hazards are also for long duration. Miners’ exposure varies with the job, proximity to the source and the preventive methods used. If these hazards are not properly managed, they can result into serious traumatic injuries, occupational illness and even death.

Few of the risks and hazards are described below:

  • Explosions: The risk of explosion is usually associated with the underground mining and it is a serious threat to the miners. Chemicals and gases that continually run through the pipes possess a serious issue of ventilation deep inside the surface of the earth.
  • Fires: There are number of materials used in the mining that can easily cause a fire and traditional fire management systems may not always work in this environment. This might affect the whole procedure which might lead to loos of life and economical loss to the contractor.
  • Dust: Dust inhalation or coal dust is the most common threat to the miners. Coal dust can cause a disease that is commonly known as “Miner’s Lung” or black lung which can lead to scarring of lungs tissue, shortness of breath or even respiratory diseases. Even though there are safety measures in place, we still come across cases relating to coal dust.
  • Cave-Ins, Collapses: Sometimes, mining can be catastrophe. The roofs or the surface of the mine can collapse due to extreme pressure which can strike miners working or can make the rocks and debris unstable.
  • Electrical Hazards: Many equipment that are used in the mining process works on electricity and are interconnected. Any shock or fire can result in tremendous amount of loss to the corporation. Sometimes, the mineral extracted can also conduct electricity which would pose additional risk in the sector.
  • Noise: Loud equipment that are used near the mines in a confined places can cause serious damage to hearing capacity or even permanent loss of hearing. Machines like roof bolters, bulldozers, front end loaders etc.
  • Gases and Vapours: Common names and health effects of gases occurring in coal mines are listed in the table below:
 

Gas

 

Common Name

 

Health effects

Methane (CH4) Fire damp Flammable, explosive; simple asphyxiation
Carbon Monoxide (CO) White damp Chemical asphyxiation
Hydrogen Sulphide (H2S) Stink damp Eye, Nose, Throat irritation; Acute respiratory depression
Oxygen Deficiency Black damp Anoxia
Blasting by-products After damp Respiratory irritants
Diesel engine exhaust After damp Respiratory irritants; lung cancer

Table 1: Gases and Its Health Effects 1

Sometimes, the risk cannot be seen and measured in the terms of lives lost or the infrastructural damage. These can come as a shock or after effects of mining. For Example- Psychological, Biological, Physical injury etc. which develops over time and cannot be easily diagnosed.

In all India has recorded 377 death in the last 3 years, as per data tabled in the LokSabha in 2019. Also, India is now heading towards sea bed mining for extracting seabed minerals and gases.

Nevertheless, mining does not have to be always unsafe. With the introduction of proper management techniques and advancement in technology the risks and hazards can be mitigated and with proper protocol in place we can see drop in the fatality rates in the mining industry.

MANAGEMENT OF RISKS AND HAZARDS:

The mining industry possess different safety challenges on the field of security. Mine safety is achieved through properly analysing the tools and techniques in the field of security, using risk matrix and knowledge of the particular area. Safety is an essential part of any industry, particularly in the hazardous environment with a history of great potential to damage the infrastructure and affect life. Hence, safety comes hand in hand in these treacherous environment.

As the mining goes deep and wide, the companies become larger in their operations that include increase in the number of workers, instruments and economic value; thus the responsibility of providing these resources safety becomes primary for the company. This challenge has to be met with proper guidance and safety gears to ensure the security of life and property during the process. For many years now, the Government is also putting stress on the safety of workers in such sectors. It is trying to develop better understanding of Occupational safety and health needs of the mining sector to minimize or prevent accidents.

We will now look at the risk matrix which is very essential for the planning process:

  Low Consequence (Rating:1) Minor Consequence (Rating:2) Moderate Consequence (Rating:3) Major Consequence

(Rating:4)

Extreme Consequence

(Rating:5)

Almost certain

(Rating:5)

Moderate

5

Moderate

10

High

15

Critical

20

Critical

25

Very Likely

(Rating:4)

Low

4

Moderate

8

High

12

High

16

Critical

20

Likely

(Rating:3)

Low

3

Moderate

6

Moderate

9

High

12

High

15

Unlikely

(Rating:2)

Low

2

Low

4

Moderate

6

Moderate

8

Moderate

10

Rare

(Rating:1)

Low

1

Low

2

Low

3

Low

4

Moderate

5

Table 2: Risk Matrix2

Risk Assessment: Once, the area of mining is determined we need to assess the potential challenge the area would bring. We have few points that would help the assessors to determine risk and put it in a certain level and present the likelihood of its occurrence through likelihood descriptor-

  • Take into account the nature of the workplace
  • Identify all the potential risks and hazards associated with it
  • Assign a level to each risk
  • Check the priority for better analysis
  • Compare the findings with other departments or companies

The compiled data of the above findings is given below:

 

Likelihood

 

Rating

 

Description

Almost certain 5 90% or greater chance of any risk or hazard taking place
Very likely 4 50-90% chance or probability
Likely 3 20-50% chance of mishap
Unlikely 2 5-20% chance of occurrence
Rare 1 Very low chance of any risk

Table 3: Likelihood Descriptors3

Risk Management: When the assessment is done using proper techniques then the management tools are easy to identify. Depending upon the level of risks which are categorised into five different categories (viz. Extreme, Major, Moderate, Minor and Low), policies with the standard operating procedures are prepared.

Some of the established categories of protection are –

  • Work Practices
  • Engineering Principles
  • Elimination, Substitution and Reduction
  • Hygiene Practices
  • Administrative checks
  • Protective gears

The outcomes of the management is much more than the safety. In fact, it will help in developing the right strategies to focus on the right numbers, help us build team management and interpersonal communication, it will teach us team work and will promote ethical practices in the organization. The heavy machines can be made to work safely by having a regular check by the technicians, which also reduces time and money that is lost during the repair.

Right equipment with proper training is required to avoid any risk that could have otherwise taken place. Today, miners rely on safety regulations combined with equipment to warn and few protective gears that would ensure minimum damage to the life and property.

Any change in the work process, changes the whole dynamics for the workers; hence they are the ones who must be first aware of the changes that have taken place to avoid workplace hazard. Follow up inspections and checks should also be done adequately for the better documentation and training wherever needed.

 

CHALLENGES ASSOCIATED WITH MINING INDUSTRY:

While there is risk in the sector, the mining industry is trying to manoeuvre and clear of the headwinds that are coming as a challenge to keep the industry in profit and intact. From volatility in the market demand to the scarcity of resources, the challenges facing by the industry has kept them thinking of the future prospects.

As, everything we use in our office, home, schools etc. are somewhere related to the mines and minerals extracted from it. But, in recent times due to some changes in the surrounding the extractions of minerals is also changing like the environmental issue, limitless increase in urbanization, seismic shifts in the technology which eventually is pressurising the industry in significant ways.

The sector we rely upon for so many things from energy to the kitchen utensils has to come with a fair share of challenges. These challenges can be taken over only when we have the idea of what these are and their gravity it has. So, let us look few of them in detail:

  • Energy: The very characteristic of mining industry is that many of the operations will be done in the remote areas and inhospitable places. Hence, building permanent power grids is not feasible to the pocket and the already scarce resources there. To solve this issue many companies are now using micro off grid technology rather than traditional power generation techniques which is less expensive. Power rental is also an option to overcome this challenge.

Moving to renewable energy sources would be helpful, but the technology and environmental conditions becomes constraint at few sites. For this, we need to adopt new technology and try to capture the energy and control the grid.

  • Health and Safety: Mining industry is always weighed by minerals on one hand and the risk associated with on the other. As mines get deeper, the danger of collapse increases. Also, with the temperature change in the mine the working condition can prove to be fatal. Hence, proper ventilation and temperature control technique has to be deployed for the safety of the miners’.
  • Talent Shortage: As the industry is failing to attract the young blood due to the safety concerns, the mining industry is getting ageing population to get the work done. This impacts the speed, accuracy, dependency and also the cost to the company in providing them extra medical facility. While the ageing people may have deep knowledge of the mines and mining but they are not used to the modern technologies used in the field and this may hamper the production process. Less number or talents joining and more workers are retiring, makes the company to ask more from the less and which leads to physical stress on the workers. Growing demand is just adding to this challenge.
  • Capital: Access and allocation of capital is the major issue in this sector. The production and equipment is getting expensive with time but the capital to raise those are not sufficient. Hence, the companies are forced to merge with the smaller companies where the not so trained people get the responsibility of arranging capital to save the company from loss and have some profit margin. Flexible finance has become so popular that it saved so many companies from shutting down as the investor are nervous in investing in high risks projects. The ongoing rapid expansion of middle class in the counties like India, China, parts of South America etc., continue to fuel this voracious demand of these commodities.
  • Price Volatility: This challenge makes it extremely difficult for the companies to plan its income and expenditure. Significant amount of projects are started in the boom years, but before the project reaches its production capability the market goes down. The current geopolitical trend has forced so many companies to stop their production. This uncertainty in market is not suitable for such high scale industry where it is not easy to adjust with the trends. Companies have to cut down operations or reduce its workforce to meet is expense and does not make a loss in the market.
  • Displacement and Rehabilitation: With new projects are taken up, more land is being encroached upon and more people have to leave their home just to make way for such projects. This large scale displacement leads to local people’s grievances and improper rehabilitation further leading to alienation and people’s distrust on the government. It is not just loss of land rather the loss of their way of life which is tribal in nature, their culture and rich traditions. It has made way for left wing extremism in the resource rich areas like Chhattisgarh, Jharkhand, Odisha, West Bengal etc.
  • Human Rights violation: Mining related deaths, inadequate rehabilitation, and rudimentary ways of mining adopted without any protective gears or protocols, etc. Massive local protests have taken place against mining in Niyamgiri hills of Odisha, Sterlite protest in Tamil Nadu.

These are monumental challenges and we need to take them seriously. We need to be ready to transform the industry with people, processes and technologies. We just cannot stick to the old traditional method of mining. We need to dive in now and find people who are collaborative and dedicated towards putting faith in their ideas and working to improve them. If we do not start now, we are definitely putting a lot at stake and will never be able to take the flight again.

RISKS OVERLOOKED:

During and after mining land goes various stages of rehabilitation. The waste rocks created are covered with the top soil, the pit is filled with sand, and otherwise the pit can be used as a lake by the community living near to it. Sometimes, new company or factory comes up there. We can easily use the area for other purpose, but it becomes very difficult to restore the same vegetative cover on the soil and the years it take to regain its fertility is too long to wait. Few of the common issues we overlook are:

  • The land area is changed significantly after mining.
  • Large pits are created which becomes difficult to fill with the sand or gravel and can be misused by the people.
  • Vehicles on site emit large amount of greenhouse gases as there is no one the checks their level of emission.
  • Dust is emitted and can pollute the air in the vicinity area. If explosives are used, the dust can cover a lot of area with high particulate matter and can cause respiratory issues living in the area.
  • Loss of biodiversity and local cultural heritage.
  • Water pollution – water from streams and rivers flowing from mining area have become acidic and unfit for drinking. For example: Meghalaya’s Kopili river, Damodar River etc.
  • Prevalence of few diseases in the mining areas – fibrosis, silicosis etc.

Environmental pollution has been caused by the Makrana Marble mines in Rajasthan, the Granite mines in Karnataka have left a big hole on the earth, and Damodar River has been severely polluted by the coal mines.

POLITICAL CHALLENGE:

The mining industry is very susceptible to the political risks as they are important to the economy. Many big industries can generate significant amount of GDP, hence they become a highlight in the many nationalist debate. This sector has potential to change the existing government policies that can lead to their license cancellation or contract reviews.

In relatively poor countries, where the resources are abundant, disparities between rising poverty and growing income can fuel civil disturbance between the locals and the industrialists. It can also lead to conflict between National government, local municipalities and international investors over the distribution of royalties and profit. Any failure to address the environmental problems can trigger issues between the local communities and the government, which can have impact on the reputation of the company or the investors.

The mining industry is very significant to the GDP, but it is also very important in generating employment and revenue. This can lead to corruption as the host government can negotiate for the concessions, or outright expropriation. While, most of the companies are prepared to deal and safety and management issues, they are unaware of the political risks. Also, they cannot avoid the issue as the investors have put faith in them. Therefore, they need to plan properly to mitigate it.

It has been in the history that without “paying their fair share”, mining in their territory is very difficult. Few common hindrances created are:

  • Delay in environment clearances.
  • Charges of corruption while allocating the blocks.
  • Arbitrary allocation of the blocks leads to long litigation process.
  • Unwanted paper works to get them frustrated with the process.
  • Judicial interventions. Example: Banning of Vedanta group in Odisha (Niyamgiri Hills) 5and shut down 88 illegal mines in Goa in 2018.6

Political interference is here to remain but the lack of legal framework can make the issue more endemic.

 

LEGISLATIVE FRAMEWORK FOR MINING SECTOR IN INDIA:

  • Entry no. 23 in the List II (State list), in the Constitution of India gives the state governments the authority to regulate the minerals located within their state boundaries.
  • Entry no. 54 in the List I (Central List), in the Constitution of India gives the Central government the authority to regulate the minerals within the exclusive economic zone of India (EEZ). In the backdrop of it, the Mines and Minerals (Development and Regulation) (MMDR) Act of 1957 was framed.
  • International Seabed Authority (ISA) regulates minerals exploration and extraction. UN guides the treaty and India being a party to it has received an exclusive right to explore poly-metallic nodules over 75000 sq. km in Central Indian Ocean Basin. 7
  • The MMDR Act of 2015 has made auctions transparent and removed discretions.
  • The District Mineral Foundation (DMF) – to address long-time grievances of affected people by mining and help them.
  • National Mineral Exploration Trust (NMET) – Stringent measures to check illegal mining and fill the gaps in the exploration process in the country.
  • National Mineral Policy 2019 – encouraging private sector to take up exploration with revenue sharing model.

Government of India’s Initiative:

  • National mineral Exploration Policy has been prepared to attract private sector into mining.
  • Star Ration of mining leases for sustainable development framework.
  • A Memorandum of Understanding was signed between Indian Bureau of Mines and National Remote Sensing Centre, ISRO to monitor mining activities and deter illegal mining.
  • The Mineral Surveillance System has also been laughed to check illegal mining through automated remote sensing technology.
  • The District Mineral Foundation Fund was created to help the people affected and mining and areas under Pradhan MantriKhanijKshetraKalyanYojana (PMKKKY).
  • 100% FDI allowed through automatic route for exploration and mining of Metals and Non-metals ores.

 

GEOPOLITICAL PILLAR:

It is a strategic analysis, especially of international relations that are influenced by dialogues, agreements, treaties or geological factors in favour of maintaining peace around the globe. India is famous for her agreement with China known as “Panchsheel”. Similar, trends were started after the world wars that made many countries suffer a lot and its repercussions still haunt us. However, these agreements cannot always guarantee us peace and stability in the region. We are familiar with the Sino-Indian War of 1962, the Panchsheel agreement did not bear fruit even after years of signing the agreement. The negotiations from the third party made the situation stable.

So, if any bilateral ties cannot stand its terms then we are having a serious issue with the geopolitics. Also, the interconnected trends are kind of transforming the overall geopolitical nature around the world; there are also vacuum created the fragile and failing states. The nature of geopolitical instability has itself changes. No one could have thought of refugee crisis or ISIS coming up just six years ago. It becomes natural that we expect such trends are going to affect the economic sector of few countries and can shake others around the world.

India is growing very fast and its economy cannot just stay in isolation. It has to develop new ties with the countries that are on equal footing. India should not be seen as just an economic partner but as a geopolitical partner as well. India, today, cannot be ignored on this front as it has left behind the non-aligned movement and it heading towards policies that are of national interests with allies like USA and Japan.

However, relations are not always positive in nature. Some are just very hard to negotiate. Our deep strategic and competitive relations with our neighbour, China, are not just limited to trade and commerce but extends to bitter border relations along the North-East states. It is a relation of both economic cooperation and strategic competition.

After we had a Doklam stand-off in 2017, the relation between India and China got strained a bit and since then the competition got wilder. China is trying to make its presence all around the Indian Ocean. In 2018, China started mining operations on its side of the border with Arunachal Pradesh, where a huge deposits of Gold, Silver and other minerals are found. Because China also claims Arunachal Pradesh as a part of Tibet, the security around the border is under fragile conditions. China’s presence in the disputed region ofJammu and Kashmir is also bothering us a lot. These tensions can really affect the economic strata of the nation. Mining being a capital intensive sector is always under threat.8

Recent crisis in Middle East and West Asian countries are affecting our export as the presence of military and non-military vessels around the Strait of Hormuz threatens the vessels carrying goods which lead to loss in the trade. Many minerals are exported from India and all those when do not find any market gets flooded in the domestic market leading to price drop.

International behaviour of any state is linked to its geography, history or culture. However, now it also depends on the political system of the states involved. We need to be little aware and diplomatically straight with an honest approach to solve such issues to have a long bilateral or multilateral ties with nations around. Also, we have many industries that are tying up with foreign countries for mineral exploration. Example: Adani Enterprises ties up with Carmichael coal mine project in Australia.

 

SWOT ANALYSIS:

Strengths: 

  • Rich and large mineral deposits in India
  • Easy availability of labours
  • Low wage of labours
  • Strategic locations
  • High demand of minerals

Weakness:

  • Outdated Mining technology
  • Poor infrastructure facility
  • Few innovations
  • Unskilled labours
  • Accidents are high
  • Hardly any Research and Development in the sector

Opportunities:

  • India has large deposits unexplored
  • Contract mining
  • Information technology solutions in changing world
  • Equipment procurement with maintenance and repairs
  • Opportunity in research and development
  • Public Private Partnerships can become more feasible
  • Outbound investment options

Threats:

  • Field Encroachment by rivals
  • Politicians might create a conflict as they look down on this industry
  • Strict environment rules

MAJOR PLAYERS:

  • National Mineral Development Corporation
  • Vedanta
  • Hindustan Zinc
  • Hindustan Copper
  • Hindalco Industries
  • National Aluminium Company
  • Bharat Aluminium Company
  • Rajasthan State Mines and Minerals
  • Gujarat Mineral Development Corporation

CASE STUDY – RATHOLE MINING:

Coal reserves are especially found in the Eastern states of India – Jharkhand, Chhattisgarh, Odisha, West Bengal etc. and predominantly on the North Eastern states of Assam and Meghalaya. Here, mining is not much commercialised due to the difficult terrain in the North Eastern states. Also, coal found in these reserves contain lots of Sulphur which lowers its energy efficiency.

A rat-hole mine is a type which involves digging of mines that are very small in nature similar to ones dug like rats. Hence, the name was given during the colonial times, Sistema del rato. They are usually, 3 to 4 feet deep, in which workers (mostly children) enter and extract coal. It is done mainly by the community or some families. Mainly done in the Indian state of Meghalaya. It is broadly of two types – side cutting and box cutting.

As we known the coal extracted are of bad quality, but lack of employment, loss of livelihood, backwardness in the region and under education makes the people to see these mines as a treasure and by extracting these coal they can earn their daily bread. Rich people employ such poverty ridden people for the extraction, mostly children are employed because of their thin body and shape. This practice of mining has become very popular in Meghalaya. Since, it is an illegal practice, it is done behind closed doors and companies fear investing in this sector.

In the year 2014, National Green Tribunal (NGT) banned the rat hole mining since it is unsafe and unscientific for workers. Also, the decision of NGT was upheld by Supreme Court after Meghalaya’s government challenged it. 

The government does not have any policy to regulate such illegal and hazardous mining method in place. Mining policy drafted in 2012 does not address the issue of rat hole mining. The coal seam is not too thick in the Meghalaya to make other methods economically viable. People there also overlook these challenges just to make their living and when people are in need, they can do anything. This lets the powerful people to use them as their workers and extract colas for economic benefit. Such irresponsible behaviour and greed can easily take someone’s life. The day was not too far:

On 13th December 2018, 15 workers trapped in a 350 feet deep coal mine in the East Jaintia Hills district of Meghalaya after it was flooded by the Lytein River. Rescue operations were carried on by National Disaster Response Force and the Indian Navy. It was one of the several mishaps that has taken place over the years, leading to the death of workers. NGT slapped anRs 100 Crore fine on the Government of Meghalaya for failing to curb the illegal mining. Unfortunately, people are still unhappy with the ban imposed by NGT and the government is trying hard to get them to terms.

Impacts of rat hole mining:

  • The river waters, especially in the Jaintia region has turned acidic
  • Off road movement of trucks damages the ecological and environmental balance
  • The practice has already been declared unsafe for the workers
  • The branch of mines can lead to caving in or flooding
  • Roadside dumping of coal is a major source of water, air and soil pollution
  • Water quality degrades and shows sign of low dissolved oxygen

Rat – Hole Mining has to be discontinued.

WAY FORWARD:

Mining industry since colonial times have seen lots of ups and downs in the market demand. This demand and supply game is common with all the industries in the market but mining sector has grown above it and made its place in the economy as a whole. It being the primary activity of the nation, involves large number of skilled and unskilled labour, capital, market and the entrepreneur. Industry also leaves ecological footprint behind in lot many ways. Now, the sector has grown a lot and it is time that it just improves with the modern needs and becomes clean as the world is under environmental crisis with economic slowdown being just part and parcel of the global market.

We must ensure the adoption of digital technology for better mineral resources exploration and surveillance. Faster clearance is required to make the process smooth and hurdle free, remembering that we conduct proper Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) before allocation the projects. There should be proper allocation process which makes the process transparent and rule based to prevent any outside influence to creep in.

Rehabilitation of the displaced should be made in such a manner that the poor get their right and what they deserve. Just putting them in a condition worse than they were in, is just the greed and no compassion. Proper check on the utilisation of District Mineral Fund is must, as this fund is the basic source of finance in the time of need. Any corruption can have a serious impact on the life of the people involved in the mining.

A regulatory body should be in place to settle the dispute relating to the sector and not burden the state judiciary. National Green tribunal issues notifications and orders regarding the protection of forest and guidelines related to the working of the projects. As it banned the rat hole mining, the NGT should keep an eye on such illegal and hazardous activities.

Mining companies should look into using sustainable procedures and waste disposal techniques, taking into account the fragile ecological state. Also, try to replenish the environment with the help of the local community or compensatory afforestation as often as possible. Once the mine has been closed, effort should be taken to rehabilitate those who lost their land or make some optimal use of the land until the land regain its natural fertility. We can reduce the input and output of the mining process to reduce the negative impact on the environment. Adopting global practices in mining and ensuring safer working condition would ensure proper growth and stability.

“Mining is like a search-and-destroy mission”.

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