"We have contributed Rs 55,000 crores to the exchequer (not budgeted) and created 1 million jobs directly and through ancillaries. This is the power of natural resources", said Anil Agarwal, Group Chairman of Vedanta as he kick started the two-day "Global Natural Resources Conclave” organised by Network 18 and the Confederation of Indian Industry (CII) in New Delhi. The conclave, the first of its kind ever in India, was aimed at providing a global platform to discuss the challenges, opportunities and potential of India's natural resources.
The finite nature of natural resources
Day 1 (April 5th) saw industry veterans and influencers from various countries highlight the issues and successes they faced. One of the common talking points around natural resources is that they are finite in nature and we will run out of them at some point. While technically this is true, such doomsday scenarios have routinely turned out to be false. Most of the assumptions are centred around the term "proved reserves" which is basically what companies assume they can pull from the ground using existing technology while still generating a profit. However, what doesn’t come to the fore is that this estimate can be impacted by new technology, i.e. discovering new resources with was hitherto not possible due to lack of technology, exploration, and recovery becoming less expensive, and greater efficiency with newer technology. This, in turn, causes the amount of “proved reserves’ to increase. The most famous prediction that comes to mind was put forward in 1981 that the last drop of oil will be drilled out by the end of 2013. Fast forward to the present and we know that global oil production has increased by 46%; reserves now stand at more than 1 trillion barrels.
India’s untapped potential
Explaining India’s reserves with a quick lesson in geology at the conclave was Sajjan Jindal, Chairman of the JSW Group. Most of the rocks found on earth have varying degrees of minerals but unless they are concentrated, the economic cost of retrieving them is too high. According to Jindal, since India was once part of the same landmass known as Gondwanaland- which also consists of South America, Africa, and the Australian continent and mineral resources have been found in plenty in these continents, India could also have large reserves of these resources. However, India has only explored 10% of its potentially resource-bearing area. Though the country has undertaken exploration, a lot depends on the exploration done by the British and India has been slow in exploiting natural resources in the country. And the case with existing reserves wasn't better as in the case of the coal mines in Jharia, Jharkhand where coal is plenty but the mines have been burning due to oxidation for more than a century. Jindal called on the government to put out these fires and utilise this premium coal which can be used for steelmaking instead for importing 20 billion tonnes of expensive coal. This will pave the way more increased steel production, more jobs and can be exported as well.
Also speaking at the conclave was Gina Rinehart, Executive Chairman of Hancock Prospecting, a privately owned mineral exploration company founded in the 1950s. Providing the contrast between Indian and Australian regulatory space, Rinehart who admits to being an ardent admirer of the Indian Prime Minister recently launched a book titled “From Red Tape To Red Carpet” based on his initiative to create a business-friendly atmosphere in the country.
Skill India to Make in India
The conclave also saw a large contingent of government ministers including Suresh Prabhu, Union Railway Minister; Prakash Javadekar, Union HRD Minister; Rajiv Pratap Rudy, MoS (Independent Charge), Skill Development and Entrepreneurship; and many more highlighting the steps taken by the Modi government to improving the overall ease of doing business from removing red tape to having a skilled workforce . For instance, while many Indians aspire to be engineers and doctors, there is a serious deficiency of skilled technical workforce with the 2015 Economic Survey pegging the skilled workforce at a measly 2%. Rajiv Pratap Rudy remarked that skilling has been defined for the first time in India under the Skill India initiative and aims to provide skills both in services and manufacturing sectors in line with the government’s vision for turning India into the “world’s human resource capital”.
Any discussion around natural resources is incomplete without sustainability and GNRC 2017 was no exception. Industry experts pointed out how, traditionally, non-renewable energy and sustainability were regarded as incompatible and why the notion was misleading. It all depended on the definition of what is meant by sustainable-for how long? If one goes by the literal interpretation of forever, then by no means can there be a sustainable way of using non-renewables.
Advocating for sustainable models of exploration and mining, HRD Minister Prakash Javadekar mentioned how the government has come up with a new sustainable model of sand mining. Using satellites can help locate how much sand has been deposited and where. These images decide how much sand can be extracted without damaging the river bed.
However, with renewables growing at an unprecedented rate, sustainability should be looked as “until technology advances such that we can tap other resources”. Already countries like China and India are heavily investing in the renewable space and the Modi government has set an ambitious target of generating 100 GW from solar alone by 2022. The sector has seen entrepreneurs and the government pour investments driving down the cost of manufacturing and providing cheaper energy.
“We started solar power with Rs 19 per unit and now through auctions, it has been brought down to Rs 3.60 per unit. We have more than 10,000 MW in place, which was possible due to sustainability and more business opportunity”, added Javadekar.