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INTRODUCTION
The mining projects were
planned centered around the available
raw material and processing facilities
as well as economical life. The
Government viewed it as an investment
and employment-generator, the local
community as a pride of having an
industry including the fringe benefits
of employment and ancillaries. Things
have changed since awareness in the
scheme of things is increasing. The
project implementation is viewed as part
of the
supply chain
and in
terms of return on investment,
Governments want a larger share and the
vulnerable society started asking what
is there in for them.
Future projects need to
be planned taking into the main
consideration of carrying with the local
community, and in coming out with a
transparent policy and tangible long
term economic prosperity for the local
community. Availability of raw material
and infra-structure no longer guarantee
the success of a project. This article
is just an overview of the shape of
things emerging and need to focus on
thrust areas before any venture is
contemplated in future for a successful
implementation.
GLOBALIZATION
Globalization
can be viewed as an opportunity to
create inter-dependence and sharing of
wealth. Advances made in the areas of
communication, transport and outsourcing
makes tapping resources world-wide like
never before. The evolving process with
outsourcing, consolidation by mergers
and take-over's across continents is
gaining momentum.
Priorities
Countries look for
investment within the country, and the
investors look for getting a
“more-than-fair” share on returns as
perceived.
Nigeria,
Turkey and
Egypt among
other countries are moving ahead with
reforms to their mining laws in order to
attract investment. In Turkey there is
resentment on the environmental controls
getting diluted to attract investment.
Companies look for protecting their
operational supply chain
and
adding insurance to their overall
strategy.
Issues
There is a growing
awareness in the schema of things and
local community feel vulnerable and
their lingering suspicions on the
motives of any project result in
resentment and resistance. It is now the
turn of the countries and local
community particularly the selective
vulnerable to demand their due and look
in long term economical prosperity.
In
India, there is an increasing awareness
and organized resistance to projects as
seen in the recent times on
environmental and displacement and
resettlement. The following represent a
random sample of current ongoing
disruptions on these issues and the
issues are widespread around the globe.
Guinea:
The
National Strike
disrupting the mining operations
(Sangaredi)
and shipping (Kamsar Port).
The alternatives to maintain the supply
chain as well as shifting of personnel
on safety grounds is contemplated for
Columbia
In the Tabaco region,
compulsory resettlement and the
quantum of compensation given for the
displaced in the
El Cerrajon Col
project
Tanzania
The key word increasingly
is: Artisan Mining:. The
insistence
of employing artisans
and small scale miners for training,
technology transfer for the upcoming
coal and iron ore projects.
INDIA
ON THE WORLD SCENE
The
supply chain insurance
is
pervading to major sectors like energy,
steel and joint ventures. Acquisition of
mines overseas by Indian companies for
coal and iron ore are on the increase.
The full potential is yet to be realized
but the direction is already there. The
coming years should see
increasing Indian presence
globally. To site a few thrust areas:
Steel:
After the take-over moves
by Mittal, Tata emerged as the fifth
largest steel firm after the Corus deal.
The signals to the global investor are
further enhanced by the Government’s
plan to spend USD 15 billion on
infra-structure over the
next decade.
Aluminum
Hindalco enhanced its
presence in the world scene with its
“Novelis” deal and is now one of the
largest producers of the non-ferrous
metals in the world. Hindalco now
controls over 20% of the world flat
rolled capacity in the aluminum sector.
Cement
The current hardening of
the price war, tilting favor towards
supply and demand and the increasing
construction activities auger well of
the cement industry. Consumption is
growing faster than supply. Capacity
utilization is over 85%. India is now
the second largest producer of cement
with a capacity of 160 million tones and
has a long way to catch up with China
presently at 1.06 billion tones.
The Government is even
contemplating a five year tax holiday
for new cement plants.
The consolidation of the
domestic market and mergers are paving
way for further expansion and moves
towards the meeting of supply-demand for
the next decade.
INITIATIVES
Initiatives from the
Department of Minerals &Energy and The
Chambers of Mines in South Africa to
revamp the mining industry focus the
thrust areas. Task forces are formed to
address the issues and necessary steps
to move forward:
Task force to contain cost will look
into the issues related to:
-
Labor
-
Price
-
Operational flexibility
-
Gold theft
Task force to review issues on
regulatory measures and investment:
-
Mining rights and permissions
-
Regulatory requirements
-
Environmental responsibilities
-
Water licenses
-
Junior mining activities
Task force to focus on issues related to
non-mining economic investments:
-
Training in rural areas
-
Non-mining capabilities
The
Indian Prime Minister recently announced
the intention of the Government to
insulate from economic upheavals and
readying a new “energy
security” plan
with a focus on non-fossil and renewable
energy.
CONCLUSION
Merril Lynch indicated
that equities exposed to energy and
mining stocks could have already seen
the best of times and sounded warning on
global liquidity. It advised for a
switch over to safer assets and expected
a slowdown during 2007.
There
is also a need for the countries to come
out with practical approaches and
regulatory measures to ensure the safe
guarding of interests in all spheres,
the investor, the Government and the
local community who are directly
affected and provide transparency and
long term tangible economic prosperity.
There is also a need for the countries
to provide adequate insurance like
energy security and infra-structure.
The
success of any project in future could
depend on a demonstrable distinct,
auditable trail of the operations
enabling transparency and accountability
in all activities and get the vulnerable
society involved.
Dependence on technology
could be increasing particularly when
software is available
for generating accuracy reports with
ability to leave a distinct auditable
trail of the operations providing the
necessary transparency. Present day
software is already capable of
determining the degree of operations
based on schedules and provide short
term and immediate alerts.
LOOKING AHEAD
The
combination of
technology,
planning, regulatory reforms, and
transparency of operations, carrying
along and involving local community as
well as instilling confidence of the
investors will go a long way to sustain
future mining projects.
The emerging forces
appear to be crystallizing already.
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