Brownfield Expansion, Greenfield Conservation: A Critical Need

"Sustainable development" implies that economic activity should be designed to create wealth for the use of present and future generations. If natural resources cannot be developed and exploited to create wealth for the nation, the result may be poverty and deprivation[1]. Crisis management soon takes over from sustainable economic development. The conservation of non-renewable resources is an important in the context of long-term future of any country and more so of emerging economies like India. Prof Stiglitz[2] points out how several countries in the wake of liberalization, privatization and globalisation may actually be increasing their GDP while becoming poor on the long-term if the issues of long-term conservation and investments in the improvements of social attributes do not take place concurrently.

In the context of mining, mineral deposits are available to a limited extent no matter how huge is the resource and ideally need to be endowed for posterity. In the past a run-away expansion of `strategic minerals’ did not take place as countries sought to have them for their domestic military needs. Even in our country, Aluminium was considered once such metal. However given the need for improving the living standards and utilising the existing technologies for the benefit of all, resources need to be extracted. There are several ways of ensuring this but the emerging concept of expanding existing areas of extraction and conserving identified deposits is very critical in the context of bauxite in India.

The current reserves of bauxite are distributed between deposits, which are as large nearly 400 million tones such as in Panchpatmali to pocket size deposits of few thousand tones in Ratnagiri Coast. Some of these large deposits are already being extracted. The proposition is that opening up of several new areas involves severe and widespread environmental consequences and social discontent. In the context of the Eastern Ghat Bauxites in Orissa, it makes immense sense in opening up only few areas with large deposits and not `pock-mark’ the entire region with several deposits being opened up. The current market situation of bauxite, with several global players being viable with imports from large distances means that deposits which are within couple of hundred kilometers does not impact the viability of the project.

The case for conservation of mid-sized deposits (~ 50-100 mt) is also important from a medium term economic and technical perspective. The rapid improvement in our technological capability in aero-space will mean that in the next two decades we will have the indigenous capacity to utilize this important element in our industries which if opened up today will be depleted by the time the country needs them and perhaps will not have the choice of the resources.

If we take the case of existing and proposed bauxite-alumina complexes in the Eastern Ghats, the requirement of each company is of the order of 3 million tones per annum. While these could be achieved by opening up several places of smaller deposits it makes ecological and economic sense to restrict to couple of large deposits, some of which have already been opened up.

Such an initiative, where policies enable brownfield expansion and Greenfield conservation will not only enable unhindered development of the industry currently but will also provide the State with options for the future without having to commit all the known deposits to investors.

Mining of bauxite has several adverse environmental impacts, which globally even the Industry concedes[3]. Widespread depletion of resources that are also critical to local livelihoods will only widen the area of community discontent. This will also enable focused attempts at environmental remediation with adequate investments rather than spreading the impact and remediation across the entire region.

The current windfall profits that mining companies and metal industries are having are leading to several players joining the bandwagon. Even in the US when the Oil Companies obtained windfall profits with sudden surge in oil prices, the State intervened to raise additional resources from the companies so that these could be invested in long-term conservation.[4]

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[1] Quashie LAK, The case for mineral resource management and development, UNU

[2] Stiglitz, Joseph, Making Globalisation Work,

[3] International Aluminum Association’s Life cycle analysis clearly indicates how huge quantum of other critical resources, particularly water is need (1ton of Al requires atleast 13 KL of Water and 15000 KWH of Power)

[4] Stiglitz,ibid

Mining and the 12th Five Year Plan

Mining is one of the most environmentally and socially destructive economic activity. It has a low contribution to the GDP but the conflict it engenders is enormous and widespread. Our country today has the dubious distinction of having illegal mines significantly outnumbering the legal mines. A new Mines Mineral Development and

Regulation Act is on the anvil and it calls for far reaching reforms in the mining sector.

The 12th Five year plan should usher in an era of Mineral Development with development as the focus rather than the current attitude of exploiting minerals.

The key emphasis for the plan has to be on

1) Rationalising and regularization of the on-going mining activities on a war

footing;

The unacceptable situation of illegal mining must be put to an end. Irrational exploitation of differing grades of ores for short term gains has to be restrained.

Illegal mining of minor-minerals particularly of river-bed across the country have

been destroying the river systems and needs urgent attention.

2) Increasing investments on exploration especially through non-invasive technologies and augmenting the reserves both on-land and within our exclusive economic zone in the oceans;

Exploration investment in the country is abysmally low and does not even constitute 2% of the global exploration investments and needs to be raised significantly. There are very little resources going into developing new exploration methods. While our

EEZ extends to 200 km from the coast, current investments are restricted only to search for oil and gas.

3) Enhancing the efficiency of the mining activities and generating more resources from “brown-field” expansion rather than opening up new “green-field” areas;

Small pocket deposits in forested regions are being opened up creating patchiness and larger impact on the forest corridors while efficiency improvements and expansion of existing deposits are being neglected. This has to be a high priority.

4) Enabling and emphasizing on local value addition and restricting export of minerals;

Though every state government talks about value addition, in the name of lack of technology or that mining is a stand-alone industry important minerals are being exported with very little benefit to the state or the communities. Value addition must be the norm rather than as an exception.

5) Developing a widespread understanding of the strategic value of different minerals and ensuring conservation of requisite quantities of such minerals;

The strategic value of various minerals must be recognized and specific efforts must be made to conserve minerals essential for the country’s future. Minerals such as bauxite, titanium, and several heavy metals crucial for future development of materials need to be assessed for our long term needs rather than for profits to corporates in the current period.

6) Ensuring strict compliance of all the environmental, social and labour laws governing mining activities and

Several environmental, social and labour laws are constantly violated in several mining contexts. The laws should be made convergent with proper oversight authorities. The blight of occupational diseases such as asbestosis and silicosis must be eliminated.

7) Enabling evolution of economic opportunities not dependent on mining.

The long term consequences of climate change and strategic future mineral availability should form the key consideration in the development of minerals. It is important to recognize that mineral bearing areas do not suffer from the classic situation of “resource curse” which is seen across the globe. In order to do this effort must be made to identify economic opportunities which are not dependent on mining.

We must recognize that the minerals will be ours for ever if we restrain mining but the wealth of the soil and other biota will be lost for ever if we mine the minerals below them. Mechanisms like the NPV do not reflect the true long term value of the ecosystem services the terrain and the plant and animal resources provide.

A colonial relic past its time…

A colonial relic past its time…

The tyrannical face of land acquisition needs to undergo a makeover, soon.

He looks vulnerable with his boyish, innocent smile. He has turned out to be a David to the Goliath that the Government represents. This diminutive, wealthless man, Anna Hazare has made the impossible possible with his dogged stance, that people across the country have backed. And in the new tide of confidence that we saw from him, he has raised the bar with his demand [among other things] for reforms in regulations for land acquisition and reparation. What did he really mean by this? What has been the scenario on ‘taking away’ of people’s lands from the mute, helpless lot of farmers in the country?

If you go back in history to 1894, you will see the British brought this law, the Land Acquisition Act, to enable the colonial administration to quickly ‘take’ lands when the State needed them for public purposes like creating the network of railways, or for logging for timber in the sub Himalayan region, for irrigation projects and such. Therefore they made it a strong procedural law claiming that there was an eminent domain of the state in the business of ‘takeover’ of such properties of people.

The act continued because it was convenient for the government. Further, it was a procedural Act that the state governments had no work to do with it. To this day, 60+ years after Independence, you won’t find many state-level rules for land acquisition. When it was a colonial power it was alright to call it ‘land acquisition’. The very idea of acquisition is unconstitutional in the context of the tyranny of such land grabbing that has been the norm in the last decade.

So what would you do? In place of acquisition you actually need that land from that person who is the right holder as of now. And you need to recognize the rights these people hold. If an organization—be it a mining company or a large power project—wants a landowner to relinquish his rights for its business activity, the holder has to be requested to relinquish his property or resources. And for the hardship, loss of livelihood, displacement from the land and the community that he belonged to, there has to be a price that the organization or the Government agrees to pay as ‘reparation’.

Well, this is a function that will be better served if the tyranny of a hundred-year-old Act is restructured to allow for various state government to make rules and regulations that will reflect such equity in the making. What applies in Rajasthan does not apply in Himachal Pradesh. Even by the current Bill, the resettlement and rehabilitation provisions can be only invoked if 100 acres are acquired together. But then 100 acres in any mountainous terrain of the hill states, of Western or Eastern Ghats, or the sub-Himalayas, is very huge.

Depending upon where the land is, settlements of communities that are sometimes centuries-old disappear forever. The State administration is better positioned to understand the sensitivities of such land acquisition—at least the local administration will recognize local conditions better than it can be done in the corridors of New Delhi.

The Central Act is far too procedural to serve the purpose any more in an economy that is growing as rapidly as now. Coal extraction alone is rising from the current level of 300 million to 2 billion tonnes by 2030! Then there is iron ore, bauxite, gas exploration and other such projects that are necessary, that need to be handled with a human face put to the process of acquiring such lands.

So what are the lessons that the rest of the world offers us today? The UN has sought ‘free, prior and informed consent’ from such landowners. This means a transparent process of partnering such requisition of land [not acquisition]. The Government or an organization cannot go into acquisition for a project saying, “I want so much land.” They need to say, “I want this land for a project.” And then explain the consequences. “It will destroy so much of the forest, draw so much water from some other area, displace people, throw up dust and such.” People need to understand what the Government or such organizations are going into. What are the risks before the community and their traditional lands and the forests around?

How do you size the need of land for a project? When the Hajira-Bijaipur-Jagdishpur pipeline project was taken up two decades ago, there were 7 fertilizer plants. They were all 1,350-tonne per day plants, with more or less the same Italian technology. In the chain of HBJ plants, IFFCO operates the same-scale plant at 376 acres. Indo Gulf Fertilisers has 672 acres. NFL has got about 700 acres. The Tatas have as much as 2100 acres.

Look at the new Mining Bill. It says any single lease has to have a cap of 100 square kilometers, or 10,000 ha. Companies end up having one pocket of deposit here, another tract of land in another region, leading to destruction of larger ecosystems around two different micro-regions. While the law was intended to avoid abuse of sensitive ecosystems, and to bring restraint in the Government’s own and of an organisation’s need for acquiring lands, that intent is not served well thanks to the lack of latitude and autonomy in decision-making at the local administration level.

These are complex issues, of course. And for every suggestion that is made for such structural changes in a system as old as acquisition, there will be a dozen potential risks that experts will identify. The question, as Anna Hazare is asking, is: What is fair to the farmer? How do we strip the government and administration of that hideous face of tyranny and corruption that is hurting the vulnerable, silent thousands across India?

Sreedhar Ramamurthi