Wednesday, September 21, 2011

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]

[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

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