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‘Good Earth’ for Adanis

Everybody is saying ‘Capitalism is in dire straits’. But nothing world-shaking is happening anywhere in the world. Arab Spring is fading despite renewed violence in Cairo and sporadic outbursts in industrially advanced countries fizzle out after some time.

True, crisis has two sides—danger and opportunities. No doubt times of danger also offer opportunities to those who are able to use them to their advantage. In India the left is actually in dire straits because they are in no position to utilise the crisis-driven danger to their advantage.

The global situation is really grave. There could be a break-up of the Euro zone with momentous consequences for the world economy; and the US economy is limping along with high levels of unemployment five years after the great financial meltdown. As growth in these two largest economies is below 2 percent at best, their multinationals are pinning too much hope on Asian economies, particulalry, India and China. And in India global players are increasingly collaborating with their Indian partners to exploit mineral resources, creating a permanent state of conflict in tribal belts where ‘earth is good’ in every sense.

India is the world's third-largest producer of iron ore and coal. Mining is lucrative but it causes conflicts: people are displaced so that corporations can exploit their land. Laws to protect the environment and Adivasis (tribal people), who mainly inhabit large areas in India's mining belt, are not enforced.

On 25 February 2012, India's most read business paper, the Economic Times, published a special front page. All it had was an advertisement of a company named Adani, "the world's largest coal trader" and India's largest mine developer. "We also operate the world's largest import coal terminal" the advertisement said and went on to talk of the group's vision: "We aim to achieve 200 mmt (million metric tons) of coal mining, 200 mmt of cargo handling and 20,000 megawatt of power generation by 2020". The advertisement continued on to the back page of the paper. The same edition prominently included a long story about yet another global mining company: Vedanta Resources, which is in a major crisis because of gigantic debts.

It is no surprise that mining companies catch the headlines in India. The total value of mineral production in this country (excluding atomic minerals) in 2010/11 has been estimated at €29 billion euro, some 12% more than in the previous financial year. The industry employs around 11 million people and only occupies 0.7 million hectares, which is a mere 0.21% of the national territory. Nonetheless, this industry is at the heart of violent conflicts that rock many areas.

Huge sums of money are riding on India's minerals sector. Enormous investments are proposed to make even more obscene profits - they are obscene because the host communities to India's vast mineral resources live in the most deplorable conditions imaginable. Indeed, some regions of this populous country are experiencing the same challenges that resource-rich fragile states face in other parts of the developing world, including corruption and political violence.

Even day-to-day events around mining are macabre in India. In the state of Jharkhand in November last year, a nun was brutally killed. She had been organising Adivasis in protest against the mining lobby. Most killings, however, are never reported.

Mining is an expensive activity that only the wealthy can afford. First, the British colonial power examined the coal belt in eastern India. Later entrepreneurial classes from Rajasthan and Gujarat, two western regions, began to control the industry. Mining stocks soared but the local farmers suffered in cultural, environmental and economic terms. Many died but, at least, there were more jobs in the times of labour-intensive mining. Today, mining hardly employs displaced people anymore.

A host of laws is meant to govern the mining industry. In practice, however, the communities whose soils are being exploited have no control at all.

A leading consulting company, Ernst&Young, talks of India as being "well endowed with several mineral resources". Its assessment later states: "Much has remained unexplored/undiscovered due to various reasons or challenges over decades. The time has come to move fast forward and leverage the opportunity of a high economic cycle and rising domestic demand to put some resources to enhance the pipeline of mineral resources."

This is how the global industry considers India's natural resource wealth.
[Contributed]

Frontier
Vol. 45, No. 24, Dec 23-29, 2012

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