Mines and Maoists

Today’s paper carries the headlines that Maoists have asked Mittal to keep his hands off the mines of Jharkhand. I am a little surprised that this is headline news, because I thought it was obvious the tribal areas were seeing a lot of violent protests — and often Maoism — because mining activities kept displacing the tribals and destroying the means of their livelihood. There is a clear historical correlation between Maoist activity and displacement. There is no information on the MOUs signed between the state governments and the mining companies, and these are treated as secret by the governments. So it would seem that the companies and the governments have something to hide. Perhaps headlines like these will make more people want to find out exactly what is going on between the mining companies and the tribals.

SMZ after SEZ?

ASSOCHAM — the Associated Chambers of Commerce and Industry of India — has recommended that states rich in minerals, like Jharkhand, Orissa, Chattisgarh etc be declared SMZ — Special Mining Zones, like the special economic zones (SEZ) in the news so much these days. Their point is that this will bring in lots of foreign money, and along with it foreign technology far superior to what is currently available in India.

Their argument is correct, but I think that their demand should be opposed for the long term benefit of India. It is necessary to develop engineers and technicians in India, and allow Indian inventors to grow, so that we don’t need to borrow foreign technologies every time we need something.

If foreign companies invest, most of the profits will go abroad — although there will be some for their Indian collaborators and agents. In addition, the technology, and  its upgrades, will remain with the foreign companies (probably developed by Indians working abroad), so India will have no hope of utilizing these mines fully.

On the other hand, if the industrialists and investors of ASSOCHAM invest in mining education and research, in less than one generation India will have the technology that we need. And all the profits from these mines can stay in India. Since there is no legal requirement to allow foreign companies to take charge of our mines, we ought to take the path of preparing ourselves to take charge.

The other issue is that if the SMZ is like the SEZ, Indian law will not be applicable in these areas. That is dangerous. For the same reasons it is dangerous for SEZs.