Sunday, July 10, 2011

Mining in Development

Although the mining industry can’t directly contribute in development but the revenue generated from mining can be utilized for the sustainable and overall development of an economy because mining helps in generating more revenue than any other industry do.

A part of the longstanding debate about the role of business in development focuses on the controversy regarding the efficacy of the mining industry in contributing to economic growth and sustainable development. Based on the success of mineral-rich industrialized countries like Canada, Australia, and the United States, mining development has long been promoted by mainstream economists as a way for developing countries to achieve sustained economic growth. Although mining did play a role in the economic development of Canada, Australia, and the United States, there were a number of other factors or “unique conditions” that favored economic growth in these countries (i.e. high levels of institutional capital, large internal national markets, scarce labour, and protected national markets.). Secondly, Power argues that the dynamics of the world economy are not the same now as they were during these industrialized countries’ development. Decreased transportation costs and the emergence of large mineral companies have resulted in the “disintegration” of the mineral industry and the local manufacturing industry.

Minerals can now be shipped cost-effectively to developed countries for processing and finishing, thereby reducing opportunities for knowledge and technology transfer and investment in host countries’ economies. Moreover, because many of the large mines in developing countries are now owned and operated by foreign multinationals, much of the wealth derived from mineral extraction is often repatriated rather than invested locally. Thus, a number of studies have found that instead of experiencing sustained economic growth, contemporary developing countries those points out, modern mining is a capital and energy intensive industry that uses very little labor. Thus, the industry will have a more significant impact on the creation of income streams in labor scarce countries than in labor abundant countries because it will provide a greater percentage of the population with employment and income. Largely dependent on mining have generally experienced worse economic performance (in terms of economic growth and poverty reduction) than resource-poor countries.

At a more local level, within a state like Odisha, mining within a tribal landscape tend to be worse off than indigenous community that rely on other forms of economic activity for survival. In fact, it is widely acknowledged that local tribal community who are totally dependent on agro forestry and NTFPs, tend to suffer the greatest social, cultural, and environmental costs of mining, while the central government and other parts of the country(urban areas) reap the economic rewards. However, that most contemporary developing countries lack well-developed social, political, and economic institutions, and given that mining has thus failed to contribute to their development at the macro-economic level, one must ask whether it is indeed possible for mining to contribute to sustainable development at a more local level.

The output is now the private Mining sector’s response to the most recent wave of public pressure on mining corporations to address the negative social and environmental impacts of their operations. Throughout the last decade, a number of high profile corporations such as TATA Steel, Vedanta Aluminium Ltd, Arcelor Steel, POSCO, Utkal Aluminium were attacked by non-government organizations (NGOs) and activist organizations for their poor human rights, labour, and environmental records. In response, a number of companies have embraced the concept of ‘corporate social responsibility’ (CSR), leading them to introduce a variety of policies, practices, and codes of conduct aimed at reducing the negative impacts of their operations and improving their contribution to society by going beyond what has been traditionally expected of business.

Odisha and Mining-2

The Land of magnificent temples and architectures is now regarded as the land of mines and minerals. Orissa occupies a significant position in India’s mineral map, in terms of its resources and production.

Odisha’s mineral deposit is not only vast but also equally diverse bearing 16.9% of the country’s total mineral reserve. Odisha has been the leading producer of the minerals since three decades.

The Ministry of Mines 2009-10 report says that Odisha shares the highest percentage of mineral reserve with it ,viz. Chromite(95%), Nickel Ore (92%), Cobalt Ore(69%), Bauxite (55%), Titaniferous magnetite (51%),lime stone( 40%), Iron ore (33%). It also has the precious metals like ruby and platinum in its womb.

In the FY 09 Odisha ranked no.1 in terms of mineral production in India. Odisha shares the highest production among India’s mineral producing states viz. Iron ore (34.4%), Bauxite Ore (30.4%), Chromite (99.2%), Manganese Ore (32.0%), Coal (19.9%), and Graphite (45.0%).
The mineral wealth of a country is pivotal to that countries Industrial development while mining contributes to huge wealth creation through foreign exchange and employment generation. Most of the countries of the world have prospered by utilizing their mineral resources in a proper way.

Odisha has the abundant mineral reserve in its crust and has all the potential to build a robust mining industry to generate more foreign exchange and employment.

Due to its liberalization and globalization of business policy many multinational mining firms throng to invest in Odisha, but unfortunately when it came to Resettlement and Rehabilitation of the local communities and environment both the govt. and the firm failed to resolve the matter, which shows a poor and inexperienced strategy for a healthy and positive industrialization in the state.contd.....

Odisha and Mining

'Odisha', known for its rich history, cultural heritage, architecture, natural beauty and for it's indigenous primitive tribes, which was attracting the foreign biologist, archeologist, anthropologist, historians and philosophers from the times immemorial.

But now it’s not that the culture, heritage and natural beauty that luring the multinational mining companies but it’s that the high quality of mineral deposits in its warmth womb.

The state regarded as the mineral basket of eastern India and home to several key minerals and ores such as Bauxite, Iron, Coal, Chromite, nickel etc, representing 16.9% of the countries total mineral resource.

Since 2008, Odisha has been the leading state in India terms of FDI in the mining sector of about INR 2.5 trillion.

From last few years a slew of big ticket investment in the mining sector raised to some one billion US dollars in the state,which shows the potential to grow its economy to a higher level but unfortunately all the multinational investors like Vedanta Aluminium Ltd. and POSCO are now struggling with the delay of their projects.

In its attempt to improve the state’s business climate the GoO(Govt. of Odisha) has issued a no. of policies like Industrial policy 2007, FDI policy 2006, Labor policy 2007, R & R policy 2006,ICT plan 2000-2005 and to encourage the private participation it introduced PPP policy 2007.And it has the mining regulatory bodies like OMC and Department of Steel and Mines.

Despite having tremendous growth potential the mining industry in Odisha continuous to face no of challenges due to the lack of poor infrastructure, mining policy and the mining regulatory bodies and some what the wasted interest of the politicians and bureaucrats.

The countries like Australia, South Africa, and Canada prospered through the proper utilization of their mineral resources to build a robust mining industry which propelled their economy to a greater high.

So it is the high time that the GoO must realize to boost its economy by proper utilization of its mineral resources by reviewing its mining policy and faster decision making in order to bring transparency and to build a robust mining industry , by encouraging the highest standards of technical, environmental, safety and social practices for the sustainable development of the society.

chilika should be in the UNESCO's world heritage site

Chilika fulfills all the natural criteria mentioned to be in the UNESCO's list of world heritage is rich in bio diversity and natural beauty.

UNESCO'S Natural criteria
  1. to contain superlative natural phenomena or areas of exceptional natural beauty and aesthetic importance;
  2. to be outstanding examples representing major stages of earth's history, including the record of life, significant on-going geological processes in the development of landforms, or significant geomorphic or physio graphic features;
  3. to be outstanding examples representing significant on-going ecological and biological processes in the evolution and development of terrestrial, fresh water, coastal and marine ecosystems and communities of plants and animals;
  4. to contain the most important and significant natural habitats for in-situ conservation of biological diversity, including those containing threatened species of outstanding universal value from the point of view of science or conservation.