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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
ECerrajon C
oproject
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:
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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