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India's new mineral policy will usher in gloom for adivasis

By Shelley Saha-Sinha

India’s new mineral policy is long on ways to maximise the benefits of mining for “the economy” but short on measures to alleviate the social and environmental destruction that mining activity inevitably brings in its wake

India is rich in mineral resources but most of these minerals are to be found in remote forested areas and the watersheds of major rivers, areas that are largely inhabited by tribal peoples or adivasis.

According to the union ministry of mines, the country ranks first in the world in the production of mica blocks and splitting, third in chromites, lignite, coal and barytes, fourth in iron ore and sixth in bauxite and manganese ore. This mineral wealth and its exploitation have substantially contributed to the growth of the national economy. The gross value of mineral production in India in 1995 was estimated to be approximately Rs 270,000 million, up from about Rs1,800 million in 1961. Mineral resources contributed 2% to the country’s GDP and constituted 20% of its exports in 2001.

Since 1991, when the economy was liberalised, private companies have begun to play an important role in the mining sector. The government thus felt the need for a new mineral policy, and in April 2008, the United Progressive Alliance government released the new National Mineral Policy (for non-coal and non-fuel minerals).

Salient features of the National Mineral Policy (NMP) 2008

The document emphasises at the outset the abundance of mineral resources in the country and the need for scientific prospecting, state-of the-art technology and economic utilisation (2.1).

Its focus is on improving the regulatory environment to “make it more conducive to investment and technology flows” (2.2).

The policymakers are also aware that mining has social and environmental impacts, so they suggest “a framework for sustainable development” and protection of the interests of the “host and indigenous (tribal) population …through comprehensive relief and rehabilitation packages” (2.3). However this has to be done in order to ensure the availability and proximity of the minerals to industry (2.4), the economic efficiency of the sector (2.5), new sources of revenue for the states (2.6), research and development of exploration techniques, technologies and economic efficiency through optimal use of minerals and training for this purpose (2.7).

Embracing capitalism

In January 2001, the late President KR Narayanan in his address to the nation on the eve of Republic Day referred to the “dilemmas of development” and asked the country to consider carefully how it chose to develop its mining industry. “While the nation must benefit from the exploitation of these mineral resources, we will have also to take into consideration questions of environmental protection and the rights of the tribals,” he said.

The National Mining Policy (NMP) 2008 addresses none of these concerns. Not only does the policy not address the social and environmental consequences of mining, it actually has the potential to aggravate the situation in terms of displacement, deforestation, environmental degradation, and water scarcity.

The emphasis of the NMP 2008 is on extracting minerals for the economic development of the country. The development of the people who live in the areas to be mined has been ignored. International mining companies are already jumping at the opportunity of getting at the impressive reserves of minerals. Firms like De Beers of South Africa and the Anglo-Australian mining giant Rio Tinto have acquired huge prospecting rights in Orissa and Madhya Pradesh. The human rights record and environmental practices of these companies have been controversial.

Mineral-rich states such as Orissa, Jharkhand and Chhattisgarh have been critical of the policy. The chief minister of Orissa went to the extent of alleging that the policy was being influenced by the international mining lobby and that it is against the national interest. He alleged that the policy favours private international companies and undermines the role of the public sector.

However, these criticisms are restricted to the economic implications of the policy. Their main concern is that the state may lose out on royalties. They have not commented on the absence of any measures that would limit the negative social and environmental fallout of mining. In fact the Orissa government has in the past violated and manipulated various environmental and human rights guidelines for issuing mining rights to private companies as is well demonstrated in the case of the Vedanta Lanjigarh project and the POSCO projects.

Two other aspects of the NMP that bear questioning are its emphasis on more mechanised forms of mining, and its reliance on private equity and foreign direct investment.

The policy makes a strong push for more mechanised, less labour-intensive mining, where the industry will largely depend on “skilled” labour with a high level of technical competence. It also proposes to substantially increase the scale of privatisation. Risk investment in survey and prospecting, joint ventures and public-private partnerships are the clear mandates of the policy. Moreover, by making environmental regulations voluntary, in the form of the Sustainable Development Framework (SDF), the NMP proposes to privatise environmental and social regulations in mining. Environmental protection is further compromised by the fact that the policy prescribes no deterrents for non-compliance.

Impact on adivasis and the environment

While the emphasis of the NMP 2008 is on extracting minerals for economic development of the country, it pays scant attention to the impact this burgeoning mining activity will have on the environment and the livelihood of local people. Mining always has serious consequences for displacement of people, deforestation, environmental degradation, water scarcity, etc, and these should be seriously addressed in any mining policy. The situation will be further aggravated when the government amends the Mines and Minerals Development and Regulation Act of 1957 to implement the policy directives of the NMP.

The NMP is ambiguous on the subject of rehabilitation and resettlement of the large numbers of adivasis who will be displaced from their lands. Most adivasis are marginal landowners or landless farmers, with no official records to prove their rights over the lands they have been living on and cultivating for centuries. They are thus unlikely to get any compensation or appropriate rehabilitation if a strictly legalistic approach is adopted.

Mining activity hitherto has neither brought any benefits to local populations nor has it shown any concern for the environment as these facts will show:

  • In India, there exists an inverse relationship between mineral production and economic growth. Sixty per cent of the top 50 mineral-producing districts are among the 150 most backward districts of the country even after decades of mining.
  • More and more forest land has been diverted for mining, violating the provisions of the Forest Conservation Act of 1980. During 1998-2005, 216 mining projects were granted forest clearance annually, as against 19 per year during 1980-97.
  • Mining projects have displaced around 25.5 lakh people during 1950-1991, and 52% of the people displaced are adivasis.
  • Chhattisgarh, which has a large tribal population, is one of the richest states in India in terms of mineral wealth. The mineral-rich districts of Bastar, Surguja, Korba and Dantewada are also tribal dominated and heavily forested. New mining projects are coming up in these districts which are among the most backward districts of the state in terms of human and social indicators.
  • Mining impacts negatively on the ecosystems of the area. In Korba district of Chhattisgarh, mining activity has affected around 78% of the forest area. According to a 2006 study by the Indian Institute of Remote Sensing, 6% of forest land has been completely converted for industrial purposes, 55% changed into barren and waste land, and around 17% became highly degraded forest.
  • West Singhbhum district of Jharkhand has abundant reserves of iron ore and forests, and 66% of its population is adivasi. Large-scale mining has not brought progress to the peoples here. Almost 50% of the population lives below the poverty line and a significant 19% of households are not food sufficient.
  • Forty per cent of the mineral-rich regions are affected by Naxalite insurgency – radicals who use force to overthrow or destabilise existing administrations that they see as corrupt and anti-poor. In Chhattisgarh, the government has pitted the adivasi population against the Naxals under the Salwa Judum, which it calls a peace campaign. This has divided the adivasis who were resisting industrial activity, including mining. This conflict has led to the displacement of about 80,000 people in the state.


As the global economy expands, the pressure on adivasi lands to yield minerals will intensify. Mining is a short-term activity with long-term effects. Though the NMP 2008 talks about scientific mining, it is an unsustainable activity and is based on the extraction of non-renewable resources. Millions of people lose their livelihoods because of mining and it has also become the main cause of social unrest, widespread human rights violation, health hazards for people and environmental degradation.

While it is true that the country needs minerals for infrastructure development, it is equally true that over-consumption by one section of society is destroying the livelihoods and environments of another section, which is at the receiving end of mining. Decades of mining have not contributed much to the economic betterment of local populations and this is particularly true of marginalised groups such as the adivasis. Poor development and marginalisation create conditions for social tensions. Mining is an activity that needs to be strictly controlled at all stages. Above all, people living in mining areas should have the capacity to take fully-informed decisions on allowing mining in their territories or decide on how to carry out the activity and ensure environmental conservation and social justice. The new NMP needs to examine these issues with a sense of urgency. The policy itself needs to be brought to centrestage and widely discussed.

InfoChange News & Features, January 2009