By Mansi Gupta
Prime Minister Narendra Modi has said this of India’s mining: “Self-reliance is not possible without a strong mining and mineral sector as the two are important pillars of our economy.”
Mining and quarrying of rocks and minerals is an ancient economic activity, though its nature and form have evolved through time. It largely includes extracting metals and minerals like coal, diamond, gold, silver, platinum, copper, tin, and iron.
However, this process of digging out the ground for tonnes of minerals inevitably leads to pollution and environmental degradation. India has rich mineral resources and the mining industry has been an important contributor of economic growth, contributing to foreign exchange, employment, and socio-economic development.
Economic Impact of Mining in India
The mining industry of India contributes 2.2% to 2.5% to India’s GDP, a figure that may seem modest. However, within the industrial sector, its contribution rises from 10% to 11%.
It shows mining may not be the core or dominating industry but, it is a cornerstone of most industrial activities, fuelling sectors like manufacturing, construction, and energy that are mainly dependent upon raw materials extracted from mines.
The Indian mining industry is a major source of employment in many big states and it provides jobs to around 700,000 people, and indirectly supports several million more livelihoods through allied activities and services such as mineral processing, transportation, and support services.
The mining industry plays a major role in the infrastructure development of the country. It contributes immensely to infrastructure development:
- Transportation Infrastructure: The construction of roads, railways, and ports efficiently needs raw materials or minerals like magnite and soil etc.
- Energy Infrastructure: Mining operations, especially coal mining, promote the growth of power plants and other energy infrastructure hence they need coal.
- Social Infrastructure: Mining companies frequently support community development projects, such as schools, hospitals, and housing, as part of their corporate social responsibility (CSR) initiatives.
- Being ranked in the top five countries globally, India also stands as a major producer of minerals like bauxite, iron, and zinc. India is the second largest producer of coal in the world and the fourth in iron ore production.
Who gets a Bite of the Mining Pie?
CIL, or Coal India Limited, contributes approximately 1.5% to India’s GDP marking its role in the country’s economic and infrastructure development. On the other hand, NMDC’s contribution is also a significant one, to India’s steel production, with its iron ore fueling nearly 30% of the country’s steel manufacturing.
Established in 1975 by the Government of India, CIL is the world’s largest coal-producing company and a Maharatna company. Not just that it is the backbone of India’s coal industry, operating mines in 83 mining areas across eight states throughout the country. CIL doesn’t only dig up massive coal mines and accounts for approximately 80% of the country’s total coal production significantly contributing to the GDP but it also directly employs more than 2 lakh people. CIL has been a leading company to play a significant role in regional infrastructure development.
Established in 1958, NMDC Limited is India’s largest iron ore producer, It operates iron ore mines in the heartlands of Chhattisgarh and Karnataka. NMDC is a major contributor to India’s steel production sector helping in industrial and financial development of the country. NMDC directly employs around 5,000 people, with a substantial indirect employment impact through various support services, underlining the sector’s importance in employment generation.
Environmental Challenges faced by the mining sector and the Need for Green Mining
India plays an important role in producing crucial minerals on a very large scale, hence it has a significant impact on environmental sustainability, social inclusion, and economic development.
Even after so much diversity in the mining and mineral industry, India has the potential to cater to all 17 Sustainable Development Goals.
For instance, ethical mining methods can help achieve SDG 6 (clean water and sanitation) by lowering water pollution, and SDGs 4 and 3 (quality education and good health) are supported by investments in community development and education programs. The sector’s transition to green mining has the potential to promote clean, affordable energy (SDG 7) and climate action (SDG 13).
The increasing demand for infrastructure and electricity along with India’s goal of becoming a USD 5 trillion economy does require a lot of involvement from the mining industry but it comes with increasing expectations of environmental, social, and governance standards, the shift towards digitalisation, the need to decarbonise value chains, geopolitical risks, and climate change.
Along with that land degradation, deforestation, water pollution, and biodiversity loss are some of the adverse effects of traditional mining practices. The mining industry in India faces many challenges, like:
- Environmental challenges: In India, there are still so many parts where Illegal mining is done, that can change river courses, lower water tables, and harm organisms. Mining is also contentious due to its environmental impact and human rights violations.
- Infrastructure: In India, there are no adequate infrastructure facilities, such as inappropriate transportation networks and lack of sufficient energy that leads to affecting mining operations in India. The lack of strong railways and strong networks in the remote mining areas increases logistics costs, while power shortage impacts the production schedules that hinder productivity, pointing out the need for targeted infrastructure investments.
- Exploration: Exploration of new mines and different areas involves huge investments, high-technology equipment and skilled labour and still it is risky. The industry also has very little investment in exploration activities.
- Land Acquisition and Permits: The mining industry faces faces procedural and permit delays in mining operations, which often leads to delays of up to 5-10 years for project approvals. The complexity of land ownership laws and bureaucratic processes for environmental and mining permits not only slows down operations but also increases overall costs.
- Policy: India’s mining policies are complex and less flexible. Governments may impose policies and regulations to maximise benefits from natural resources, which can include higher taxes, permitting fees, and export duties.
- Technology: The industry is not as high-tech as it should be, nor is it as environment friendly. Our Mining industry needs to keep up with rapid changes in technology, such as artificial intelligence, data science, and automation.
The mining sector must navigate volatile global markets, where commodity prices experience dramatic shifts due to various factors. One such instance is the COVID-19 pandemic in 2020 which triggered significant disruptions in the mining industry. Iron ore prices, which had been stable at around $90-$100 per metric ton in early 2020, surged to over $200 per metric ton by May 2021.
At the same time, demand for a few minerals has increased as well because the global focus has been shifting towards technological advancements and the transition to green energy. For example, the demand for lithium, cobalt, and rare earth elements has skyrocketed as they are essential components in batteries, electric vehicles, and renewable energy technologies.
For example, the price of lithium carbonate has surged over 400% between 2020 and 2022 due to its critical role in EV batteries.
What is Green Mining?
The concept of green mining is emerging as a solution focusing on new technology and practices that decrease or minimise the environmental effects of mining.
One example of sustainable or green mining in India is Tata Steel’s Noamundi Iron Mine. Tata Steel has implemented advanced water management systems, rainwater harvesting and afforestation programs, significantly minimising the effect of mining operations on the environment.
The organisation has planted more than 1.2 million saplings in the mining area and has achieved more than 40% green cover. Along with that, they have set up a 3MW solar power plant at the Noamundi mine, promoting the use of renewable energy.
Another prominent example of Green mining is Hindustan Zinc’s Rampura Agucha mine, where they use state-of-the-art technology to reduce waste generation and increase efficiency. To reduce the need for surface disposal Hindustan Zinc adopted paste fill technology, where in they backfill mined-out areas.
In addition to these environmental initiatives, Vedanta has also shifted its focus to community development programs by investing in healthcare, education, and livelihood projects which benefit more than 3 million people in the region of its operation.
Global Best Practices in Sustainable Mining
Mines provide a lot of critical raw materials and resources to drive society ahead and foster economic growth and technological advancement, yet this needs to be balanced with a holistic environmental and social responsibility. For sustainable mining companies making programmes and adopting better practices isn’t just about ethics or social impact it is the need of the hour too.
Adapting to new technologies, more efficient energy resources and quality not only will impact the environment positively but also help in reducing production costs and improving competitiveness.
The question is How can sustainable mining or Green Mining be achieved?
By focusing on these five key areas:
Turning Mining Waste into Profit through Sustainable Practice
Across the globe 100 million of tonnes mining waste is generated in the form of rocks and tailings which is an environmental threat if not treated right, as it happened in Brazil in 2015 and 2019 by the breakage of the tailing dam. By reducing, and reusing mining waste from liability to profit and by re-treating tailings for valuable minerals, reducing environmental risks with modern storage and safety measures. This sustainable approach turns 100 billion tonnes of waste into economic opportunities, ensuring safer and greener mining operations.
Water conservation
Mining activities consume millions of tonnes of fresh water and the pressure on companies to conserve water increases to reduce their consumption of fresh and bulk water, and ensure discharge meets the highest environmental standards – or better yet be recycled for applications like agricultural irrigation. Mines need to ensure the highest standards are being followed for water management the management of Acid Mine Drainage needs to be evaluated before being into the rivers as it may impact the water bodies’ ecosystem.
Choosing renewable sources of energy to lower C02 emission
Mining requires a lot of energy consumption in its day-to-day operation, alone gold mine operations take up to 132 terawatt-hours per year. Using renewable sources of energy such as solar, wind and hydroelectric power isn’t just helping mines to reduce their carbon footprint, improving the overall sustainability of the industry in a more carbon-sensitive future.
Making lives thrive beyond the mines
The mining industry provides jobs to the locals especially in remote areas, but mines are finite and organisations often leave a region, hindering the local population’s economic growth. Therefore long-term employment of these miners depends upon sustainable business and financial opportunities independent of the mines.
Restoring destroyed land
Mining degrades soil quality and harms biodiversity, as it eradicates topsoil and subsoil, removing a significant amount of vegetation. To operate as a sustainable miner, the company must build a rehabilitating the site to reverse the impact. The objective is to leave the land in the same or better ecological condition. It is being done through various methods like reforestation and the removal of mining infrastructure and waste.
There are several mine operators around the globe setting benchmarks for Green Mining Practices. For example, Rio Tinto, A well-known and leading global mining group, has integrated sustainability into its core of operations. They are focusing on reducing greenhouse emissions, water conservation and biodiversity protection.
Rio Tinto’s Oyu Tolgoi copper mine in Mongolia is one such example where the company has used advanced water recycling methods and community engagement programs, they have recycled over 85% of its water which has reduced freshwater consumption significantly.
BHP, another huge mining operator has committed to achieve net-zero greenhouse emissions by 2050. The use of renewable energy in their operations, innovative waste management techniques, and restoration of mined lands are some of the aspects of BHP’s sustainable practices. At its Escondida copper mine in Chile, BHP has invested in a desalination plant to provide a sustainable water source, reducing dependence on freshwater resources in the arid region.
Global participation, collaboration and sharing of knowledge are essential for the advancement of sustainable mining practices. India has been actively participating in international forums and initiatives to learn from global best practices and implement them in the domestic mining sector.
One such example is India’s partnership with the International Council on Mining and Metals (ICMM) which provides Indian companies with access to best practices, tools, and frameworks for sustainable mining. These collaborations help in building capacity and promoting a culture of sustainability within the Indian mining sector.
Conclusion
The growth of India’s economy is interlinked with its mining industry. With times of increased mineral output correlating with industrial booms, the mining industry of India has stood as a pillar in the economic growth of the country. For example, the liberalization of mining policies in the 1990s spurred a surge in exports, particularly of iron ore, which saw a 27% increase by 2004, significantly boosting the country’s foreign exchange reserves. The surge in mining activities has pushed economic growth in 2021-2022 the post-pandemic years, it contributed to a 9.5% GDP growth rate for India, as reported by the Ministry of Statistics and Programme Implementation.
In the fiscal year 2022-23, India exported approximately 10.37 million tonnes of steel worth $14 billion. Driven by the growing demand from sectors like construction and automotive this increase in exports highlights the sector’s role in boosting foreign exchange earnings and supporting economic growth.
However to make sure the impact is imperative and the growth is sustainable we have to move towards green mining practices. To make sustainable mining operations a complete reality requires a concerted effort from all stakeholders, including the government, mining companies, and communities. As we move towards a greener future, the mining sector will play a crucial role in driving economic growth and ensuring our natural resources can be transferred to the next generation of use.
