Vedanta Resources? $2.6 billion takeover of Asarco Llc., a bankrupt copper miner located in the US, marks the first overseas foray of an Indian company in the mining sector. It is also one of the largest overseas purchases ever by an Indian firm. Sadly, though, the mining sector in India lacks a similar dynamism. Despite a number of policy changes after the recommendations of the Hoda Committee in 2006 and followed by the new National Mineral Policy in April 2008, the mining sector remains mired in bureaucracy and caught in turf battles. Some of the complications faced by mining in India are similar to the ones which bankrupted Asarco?in the domain of environmental clearances and lawsuits. Since most of India?s unexplored mineral wealth lies in forested areas, there needs to be a more focused policy on balancing the needs of industry and development on the one hand and conservation and ecological balance on the other. In India, this often ends up as turf battle between the ministry of environment and the ministry of mines, with little to show in the way of positive outcomes.
There are other problems too. Mining infrastructure, from the mining pit to the final consumers, needs dramatic upgradation. The government wants to use public-private partnerships to develop this infrastructure. But the private sector seems to prefer to stay out of the policy confusion. Part of the problem lies in the domain of state governments of mineral -rich states. They have consistently demanded a ?fair? share of revenue from natural resource extraction on their land. Orissa has also forced the Centre to concede, in its new mineral policy, the right of states to give preference to those prospective miners who will also set up value added activities within the state boundaries. At the heart of this battle is the desire of mineral-rich states to move up the value chain rather than see the raw material exported abroad or to other parts of India for value addition. The central government has fortunately not banned the export of minerals to states outside the mining state or to other countries. But the battle between the Centre and states is far from over. In all these battles, private investment in mining continues to suffer despite policy approval and indeed preference for private and foreign players. The ground needs some urgent clearing before mining can begin in earnest.
