Can India achieve its ambitious aim for a tech-driven low-carbon energy economy?

India’s mineral resources have always been lauded globally for robustness and diversity. The country has been a major contributor to the global mineral resources. Moreover, to a major extent, India’s mining industry has contributed to the unemployment crisis within the country by employing internal migrants.

The period of the stringent lockdown due to COVID 19 was challenging for the mining industry. With the internal migrant returning to their native states, the mining industry was unnerved by COVID 19 situation. Though the large mining companies like JSW and NMDC continued their operations, earning meagre profits, small mining companies faced the challenge to continue operations with the dearth of both labour and resources.

The economies and markets are opening to counter the existent economic crisis. India faces a twofold challenge associated with mining i.e. to ensure that sustainable high growth is achieved, driven primarily by technology and innovation; and to secure a green future amongst the population. Many countries like Norway, Sweden and Vietnam have long realized the need for green developed and pushed reforms to limit carbon consumptions. Countries like Apple, Alibaba and Amazon, have also vowed to eliminate carbon usage by 2030.

In India, however, ensuring sustainable growth with existing mining infrastructure requires a strategically and priority-based approach. Since the mining industry is amongst the Indian economy's major contributors, the urgency to promote environmental health needs to be coordinated with financial prosperities.

Over the past few years, the exploitation in the mining industry has ensued some major environmental crisis. The ambitious projects laid out by big mining companies have significantly added to the greenery surrounding the mines. Moreover, due to a surge in mining, humans were impaired with diseases like Tuberculosis and Silicosis.

For example, the illegal iron and manganese mining in Karnataka’s Bellary district led to the loss of 75% of cultivatable agricultural land. Similar incidents were observed in Orissa and Chhattisgarh which are abundant with coal mines. In 2016, the Supreme Court of India took a Suo-motto cognizance banning illegal mining in India, thus ordering the respective state authorities to compensate the victims of the mineral exploitation.

A national Green Tribunal was formulated to monitor the exploitation of mining lands, but it was only imperceptibly effective.

With pre-existing challenges, the need for having a greener environment with a sustainable mining approach seems conflicting. According to the World Bank Report, the production of minerals such as Graphite, lithium, and Cobalt may rise by as much as 500% by 2050 to meet the world’s growing demand for green energy.

So, the question that India is facing at present is: Are the current mining policies enough to reach the ambitious goal of large-scale adoption of clean technologies, renewable energy, energy storage and electric vehicles? Are the mining policies enough to enlist the country amongst the Green-energy nations around the world?

Need Vigilance for Existing Mining Reforms

A report by Brookings India, 2020, states that India’s mining land is excellent but many mining lands across India are unexplored to meet the growing demands of mineralization and extraction. The report by the Indian Bureau of Mines has cited that currently, India produces about 95 different mineral commodities. The Geological Survey of India has identified 0.52 million sq. km area as the Obvious Geological Potential site for mineralization.

However, a major loophole observed with the current mining infrastructure is the limited budget for mining. As compared to countries like Canada and Australia, India’s exploration expenditure is insignificant. In 2019, Canada and Australia accounted for 50% of the US$ 9.3 billion global exploration expenditure in non-ferrous metals, according to a survey done by S&P Global.

Moreover, the country’s existing mining policies are faced with bottlenecks from the national to the regional level. Though reforms have been chartered, we cannot overlook that these reforms are not fully executed to promote the mineralization and enhance the resource sector. This implies that only a handful has reached the desired outcome out of the many aims of these policies. For example, Amendments to the Mines and Mineral Development regulations (MMDR) Act in 2015 successfully executed transparency in the allocation of mines but failed to focus on extensive exploration. The MMDR act also failed to deliver its promises about freeing up mines for auction with no clarity over illegal mining.

Foreign Direct investment has also not been successful in countering these challenges. The sector only attracted 0.7% (US$2.2 billion) of total FDI worth US$299.4 billion in the country over the last decade, despite an allowance of 100% in the market.

The existing norms are falling short of developing the mining infrastructure of the country. For mining to flourish, clarity about the policy environment's secure tenure, competitiveness regarding auctions, deadline for budget approvals, and freedom to market the mined products either locally or globally, is imperative. Moreover, conservative approaches like First Come, First Serve during the allocation of mines, and Exclusive Reconnaissance Permit must be vanquished. Stringent monitoring is required for the effectiveness of the rules laid out by the National Green Tribunal, to prevent environmental Deterioration. This also includes monitoring the air pollution caused by mines.

The technologies like Internet-of-Things will be a suitable option for alerting the authorities in the case, the air pollution by mining companies exceeds the normal value. By deploying Data Analytics the govt. agencies will be able to explore areas with maximum mining potential and those that can be detrimental to humans and the environment.

Lastly, by deploying artificial intelligence and Blockchain, the flaws associated with the revenue, expenditure, and allocation of mines, as well as the transparency of the mining infrastructure can be monitored.

Outlook

India’s mining industry is a major factor in the country’s economic growth. For the country’s aim to usher in a tech-driven low-carbon energy economy, the country requires some essential policy reforms.