Of Iron ore policy, small scale mining and devastation

The recent decision (2nd May ‘2007) of the Central Government to reduce the export duty on ore with iron content of below 62 per cent to Rs 50 per tonne will have injurious ramifications to the principles of mining and also on the community that thrives around the mining regions. This is an insult to the injury that the Indian Iron ore mining is plagued with even at a time when the prices are booming. The export levy would continue to be Rs 300 per tonne on iron ore rich beyond 62 percent. The impact is expected to be two fold. This has apparently been done to discourage the export of iron-rich ore and only make available value-add steel and iron products in the international market. Both, China and Japan have been protesting high export duties on iron ore levied by the Union Government. China, according to reports, threatened to boycott iron ore from India. The latest duty reduction may lead to softening up of China's stand vis-à-vis iron ore from India. But this points to few other very grave things. Has not our finance minister been tricked into this by the small scale iron ore mining lobby to a decision that would be a drag on royalty? What happens if some miners blend rich iron ore with the poorer one to keep the iron percentage below 62% to play hide and seek with the levy in connivance with some of our own people or even with the Chinese and Japanese. Can not one see the chuckle in the faces of the certifying officers in for a big time with the manipulation of reporting the grade values? What if high grade ores are passed as low grade ores with money changing hands? Such policies lend to the credos of short-sightedness of the government. These knee –jerk reactions from the ministry are bad for the industry. Can there not be a policy to encourage setting up of steel plants using below 62% grade Iron ore, even on a collaborative basis? Apparently, the policy seems to encourage small scale mining of poor grade ores. At the present, it is not a proper thing to do.
With the start of liberalization of Iron ore export , pocket mining of iron ores have increased in the sourthern and western tracts of India in an unprecedented scale. The scourge is now spreading in Goa. Hugely manipulated by the local mafia and politicos, the small reserves are squandered for profiteering in manners never seen before. A visit to the Bellary-Hospet region of Karnataka would open the eyes of anyone of the wanton destruction of small ore bodies in total disregard to the laws of mineral conservation and to the community of poor local inhabitants. Who are being benefitted: local mineral mafia, politicians and a handful of administrators. What distinction it has brought to the region. It is said, not without doubt though, that the region has the highest number of private aeroplane owners of the country. The fly by night operators do require them. Almost surely, the local people ,even if, are temporarily well-off but only to be trouped back to darkness once the small scale mining comes to an end.
Hence, such oblique encouragements to small scale Iron ore mining will be counterproductive in not very long run for the following reasons:
• Small scale mining by scope and size are unable to comply with basic rules of industrial safety, environmental upkeep and social responsibility.
• The ownership structure is so fragile that they can not be held for any impropriety.
• Such scale of mining does not lead to the development of any organizational culture. We must learn the lesson from licensing of small explosive manufacturers who all but devastated the culture of healthy explosives manufacturing and development.
• They are more exploitative of labor than large scale mining per se .
• Small scale mining can not have economies of scale. They would lack efficiency and enterprise, before long.
• Contrary to the popular belief, they do precious little to the sustainable development of a region. In fact, they care less.
• The mining practice followed is archetypal. They are not main stream mining and thus forever looked down upon by the professionals.

In an era of consolidation ,we must now think of small multi ore body single lease system to a solvent party than to distribute individual leases for each small ore body. The concept of small local ownerships is outdated, and does not do any good to anyone other than the owner.

The mining industry does not have a patient ear to listen to the NGOs. This is about the state of denial we are cocooned to. But for once , let us hear what Sunita Narain of Center of Science and
Environment, one credited with the findings of pesticides in cola, has to say about small scale Iron ore mining in Goa in one of her latest web offerings:

Industry has its own ways of 'persuading' local people. Everywhere I went, I heard tales of corruption and nepotism. The best tool seemed to be for local leaders-often panchayat heads-to first take people's
concern to the miners and then use this opposition to get lucrative contracts. The best going deal is in transportation. In all this, the local politician has been reduced to nothing more than a middleman-a
pimp for the miners to milk.

Are we with the community or against it ? Are we, the people of and around the minerals industry, losing sight of our own reasons of existence? Are we not responsible?