EFIC warns of threats to Indian mining

Australia's export credit agency EFIC has reported that mining and mineral exploration in India is being increasingly threatened by Maoist rebel guerrilla groups.

Many of the country's key undeveloped mineral deposits lie in regions where the rebel groups have their strongholds.

These groups are said to be tapping into growing rural resentment of the increasingly visible divide in wealth between city and country, and concerns about rapid industrial development and plan to create special economic zones.

"The rebels are taking advantage of discontent with industrialisation and uneven economic development to broaden their activities into urban areas and regional politics. This could hinder the government’s ambitious plans to expand mining and heavy industry,” comments EFIC senior economist Ben Ford in EFIC’s latest world risk developments report.

There have been a number of attacks in the resource rick regions of Orissa, Andhra Pradesh and Jharkhand. In February, an attack on police stations in the eastern state of Orissa left 18 dead.