Technology fuels 30% fewer jobs amid soaring commodity prices

Technology fuels 30% fewer jobs amid soaring commodity prices

Thanks to technology, total employment in India’s formal mining industry has decreased by 30% in the last decade although mineral production, fuelled by the commodities boom, has jumped threefold, says a new study. But India continues to have a disproportionately large number of workers in mines in relation to mineral revenues, when compared with most other mining nations.

Employment has fallen from 710,000 lakh to 550,000 lakh between 1996 and 2004, primarily because of increased use of machinery and automation, according to data in a report compiled by the advocacy group, Centre for Science & Environment. The report will be formally released in October. The 350-page State of the Environment Report shows that value of production, including metallic and non-metallic minerals and fossil fuels, has tripled from Rs25,000 crore in 1993 to Rs84,000 crore last year.

Comparing global employment practices and despite the overall reduction, the study says India has more employees for every $1 billion (Rs4,050 core) in revenue from mineral production, than key mining countries Canada, Australia and South Africa.

“India provides 30,000 jobs for ever $1 billion revenue," says Chandra Bhushan, who co-authored the paper with Monali Zeya Hazra. “It’s still the largest employer." The other three countries employ an average of only 2,000 people for $1 billion dollar revenue.

The report also predicts that local struggles in many mineral-rich districts, which also have high poverty rates, will pose a serious challenge to the mining sector.

About 40% of the top 50 surveyed mineral producing districts are affected by local extremist forces, including naxalism. The states most affected by armed resistance are Jharkhand, Orissa, Chhattisgarh and Andhra Pradesh.

Nearly 31 of the 50 top mineral-rich districts that produce coal and bulk minerals, such as iron ore, limestone and bauxite, fall under the 115 most backward districts category. Lagging behind in human development index and economic backwardness are Orissa with 27 districts out of 30, Jharkhand with 19 out of 22 and the entire state of Chhattisgarh, barring one district.

Orissa has a quarter of the country’s iron assets, with an estimated reserves of four billion tonnes. But its largest iron ore producing district of Keonjhar ranks 24th out of the state’s 30 districts in human development index. Various parameters such as poverty rate, infant mortality, literacy and per capita income were used to measure social and economic progress.

Many of these states with vast mineral resources have higher forest cover at 40% than the national average of 18%. A total of 0.75 million hectares been leased out for mining in the country, the study notes.

The study is coming at a time when the Centre and states are engaged in a debate whether investors should obtain a captive mine to set up a manufacturing plant, particular steel mills. This is the heart of a controversy over the new mineral policy, which says “value addition" should not be criteria for mine development. States, meanwhile, want to usher in investment by handing out captive mines to generate employment.

The report also states that coal producing districts have a better human development index than iron ore producing districts. Coal mines, which are led by government companies, were the highest employer at 410,000 in 2003. Iron ore miners had 35,023 people on payroll during the period.

The report also highlights that poor regulation of air quality and mines inspections, and non-existent guidelines for mineral transport and watershed conservation, will remain problems for the mining sector.