Page 26 - Insurance Times September 2021

protocols, etc. Massive local protests have taken place as they are important to the economy. Many big industries
against mining in Niyamgiri hills of Odisha, Sterlite can generate significant amount of GDP, hence they become
protest in Tamil Nadu. a highlight in many nationalist debate. This sector has
potential to change the existing government policies that
These are monumental challenges and we need to take can lead to their license cancellation or contract reviews.
them seriously. We need to be ready to transform the
industry with people, processes and technologies. We just In relatively poor countries, where the resources are abundant,
cannot stick to the old traditional method of mining. We disparities between rising poverty and growing income can fuel
need to dive in now and find people who are collaborative civil disturbance between the locals and the industrialists. It
and dedicated towards putting faith in their ideas and can also lead to conflict between National government, local
working to improve them. If we do not start now, we are municipalities and international investors over the distribution
definitely putting a lot at stake and will never be able to of royalties and profit. Any failure to address the environmental
take the flight again.
problems can trigger issues between the local communities and
the government, which can have impact on the reputation of
Risks Overlooked: the company or the investors.
During and after mining land goes various stages of
rehabilitation. The waste rocks created are covered with The mining industry is very significant to the GDP, but it is
the top soil, the pit is filled with sand, and otherwise the pit also very important in generating employment and revenue.
can be used as a lake by the community living near to it. This can lead to corruption as the host government can
Sometimes, new company or factory comes up there. We
negotiate for the concessions, or outright expropriation.
can easily use the area for other purpose, but it becomes While, most of the companies are prepared to deal with
very difficult to restore the same vegetative cover on the safety and management issues, they are unaware of the
soil and the years it take to regain its fertility is too long to political risks. Also, they cannot avoid the issue as the
wait. Few of the common issues we overlook are: investors have put faith in them. Therefore, they need to
Y The land area is changed significantly after mining.
plan properly to mitigate it.
Y Large pits are created which becomes difficult to fill
with the sand or gravel and can be misused by the It has been in the history that without "paying their fair
people. share", mining in their territory is very difficult. Few
Y Vehicles on site emit large amount of greenhouse gases common hindrances created are:
as there is no one to check their level of emission. Y Delay in environment clearances.

Y Dust is emitted and can pollute the air in the vicinity Y Charges of corruption while allocating the blocks.
area. If explosives are used, the dust can cover a lot of Y Arbitrary allocation of the blocks leads to long litigation
area with high particulate matter and can cause process.
respiratory issues in the area.
Y Unwanted paper works to get them frustrated with the
Y Loss of biodiversity and local cultural heritage.
process.
Y Water pollution - water from streams and rivers flowing Y Judicial interventions. Example: Banning of Vedanta
from mining area have become acidic and unfit for group in Odisha (Niyamgiri Hills) and shut down of 88
drinking. For example: Meghalaya's Kopili river,
illegal mines in Goa in 2018.
Damodar River etc.
Y Prevalence of few diseases in the mining areas - fibrosis, Political interference is here to remain but the lack of legal
silicosis etc. framework can make the issue more endemic.

Environmental pollution has been caused by the Makrana
Marble mines in Rajasthan, the Granite mines in Karnataka Legislative Framework for Mining Sector
have left a big hole on the earth, and Damodar River has in India:
been severely polluted by the coal mines.
Y Entry no. 23 in the List II (State list), the Constitution of
India gives the state governments the authority to
Political Challenge: regulate the minerals located within their state
The mining industry is very susceptible to the political risks boundaries.

26 The Insurance Times, September 2021