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The fight to unlock India's mineral riches

Areas of central and eastern India play host to some of the world’s largest deposits of iron ore, vital to the country's modernisation. But these underground treasures are mostly inaccessible due to an ongoing Maoist insurgency across large swathes of the region, which has claimed more than 10,000 lives. Clearing the area of violent rebels could free up $80bn in mineral investment for the country, but can the government and local agencies accomplish this?


Under reformist Prime Minister Narendra Modi, India is moving forward with its efforts to modernise the economy and build robust, homegrown industries that can survive and thrive in a global marketplace. Boosting domestic manufacturing is a major priority, and spending on infrastructure projects like roads, housing, airports and urban transport systems is rising as the country looks to follow China's model of strategic mega-projects. Tata Group expects the government and private sector to spend $668bn on infrastructure in India between 2012 and the end of 2017.

India's domestic mining resources will need to play a prominent role in this economic surge, with the country's large iron ore deposits particularly important for crucial steelmaking operations. But making the most of these resources has become a difficult knot to untie.

On top of the prolonged moratorium on iron ore mining in Goa, which was only recently lifted, there is the thorny issue of accessing massive high-grade iron ore deposits in central and eastern India, the vast majority of which are located in regions currently embroiled in a long-running conflict between government security forces and violent Maoist insurgents, who have made it a priority to wreak as much havoc as possible on local mining and manufacturing operations. Over the last two decades the struggle has claimed thousands of lives - of police and government soldiers, of rebels, and of innocent civilians caught in the middle.

This conflict, which centres around regions such as Chhattisgarh, Jharkhand, Bihar and Odisha - collectively known as the 'Red Corridor' due to the persistent presence of the Naxalite-Maoist rebels - is compromising the security of existing mining operations and holding back an estimated $80bn of new investment in the regions, mainly due to the lack of access to deposits. Although local government forces have been gradually eroding the Maoists' territory and support through various means, the insurgency has proven resilient and attacks are still a regular danger for civilians and mining projects alike.

Bhavin Vyas, political and security analyst at leading global risk consultancy the Risk Advisory Group, discusses the threat still posed by the conflict to mining operations, the 'carrot and stick' strategies adopted by the government to stamp out the attacks, and the long path towards a meaningful reconciliation that could see strategically vital resources become accessible to help secure sustainable growth for a modern India.



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