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Mining for Trouble: The Resources at Stake in the China-India Border Dispute

September 29, 2020

What is at stake in the recent Sino-Indian border clashes? Competing efforts to build roads, exploit mineral deposits, and secure water resources are an important backstory to the recent escalation of tensions between two of Asia's nuclear powers.

On June 15, 2020, with the world distracted by the COVID-19 pandemic, China and India entered into a new confrontational phase of the tense standoff along their undefined 2,100 mile (3,380 km) border, known as the line of control (LOC). There were twenty Indian casualties from hand-to-hand combat in the Galwan Valley in Ladakh, the first deaths in a confrontation between the two neighbors since 1975. The Chinese Foreign Ministry admitted to some limited casualties but declined to report their number. The two countries fought a brief border war in 1962, after which China acquired Aksai Chin, the locus of the June clashes, which India claims as a part of Jammu and Kashmir.

A meeting brokered by Russia, ahead of the Foreign Ministers Meeting of the Shanghai Cooperation Organization in July, lowered tensions briefly. However, in early September 2020, China claimed that India fired at Chinese positions on the southern bank of Pangong Tso, a lake in Ladakh, which would be the first use of live fire since 1996, while India argued that it was China that fired in the air to intimidate Indian troops.

International observers have offered several explanations for the sudden hostility between China and India:

  • Sovereignty: Xi Jinping has been hypersensitive to perceived efforts to contest Chinese sovereignty. International criticism of his handling of the COVID-19 and pushback on numerous other fronts (Hong Kong, Belt and Road, Taiwan) only has increased his determination to show China's strength.

  • Territory: China claims 35,000 square miles (90,000 square kilometers) of Indian territory including Arunachal Pradesh, while India claims 15,000 square miles (38,000 square km) of Chinese territory, including Aksai Chin. In August 2019 India incorporated Jammu and Kashmir into the Union Territory of Ladakh, a move which Chinese officials cricitized as a unilateral change in Kashmir's status.

  • Perceptions of Changes in the Status Quo: Each side accuses the other of making infrastructure improvements that would provide it with strategic advantage over the other and each is seeking to deny the other such opportunities.

  • Geopolitics: China fears India drawing closer to the U.S. while India sees China's Belt and Road Initiative as an effort to encircle it, especially its support for Pakistan's infrastructure plans through the China Pakistan Economic Corridor. India opposes the project by China and Pakistan to build a major dam in Gilgit-Baltistan, in the Pakistani part of Kashmir as well as other road construction along Pakistan's border with India.

Where's the Risk?

There's an important backstory to the Sino-Indian border tensions involving Chinese mining projects near disputed areas, with potential regional water risks, as well as competitive roadbuilding and dam construction on both sides.

China's Risk

Aksai Chin is home to the Huoshaoyun lead-zinc mine, Asia's largest metals deposit and the world's seventh largest, with recoverable reserves of 18.87 million tons of high-grade zinc and lead. This mine will nearly double China's current supply of mined zinc, currently 44.39 million tons. Due to COVID-related supply disruptions in South America, China's imports of lead and zinc increased in 2020 by 31.7% and 17.5% respectively over the previous year. Zinc is used in a wide range of industries, including automotive, construction, and fertilizer production. China is both the leading producer and consumer of zinc for use in fertilizer, which India also requires in large quantities to secure a sufficient food supply.

In recent years, China has been developing the Huayu gold mine in Lunze (Lhuntse) in south Tibet, near the border of Arunachal Pradesh, a part of India that China claims. The mine may hold as much as $60 billion in gold, silver, and other minerals, including rare earths, according to Chinese geologists. Development accelerated in 2017, the same year India and China had a tense 73-day stand-off in Doklam on the western border of Bhutan, over Indian opposition to China's building a road on territory claimed by Bhutan, a position that India supports.

Massive infrastructure, and a growing PLA presence, have accompanied the Lhunze mine's development leading to comparisons between China's use of resource and infrastructure development to boost sovereignty claims in south Tibet with its "island" reclamations in the South China Sea. In an unusual personal reply to a letter from a herding family in Lhunze on October 28, 2017, Xi Jinping "encouraged them to set down roots in the border area, safeguard the Chinese territory and develop their hometown." In response to media attention to the Lhunze mine, just 15 km from the disputed border with India, Chinese Foreign Ministry spokesman Lu Kang asserted that China had the right to develop the mine which was “completely within China’s sovereign territory.”

Both China and India have been improving their infrastructure near the line of control. India contends that China has been developing roads near disputed areas to facilitate future mining projects, near India's Gogra border post for example. Chinese analysts view the completion last year of India's Darbuk-Shyok-Daulat Beg Oldi (DSDBO) road leading to an airstrip in Ladakh as an effort by India to gain tactical advantage over China in the region.

Global Risk

By departing from their 1996 agreement to avoid live fire on the border, China and India are creating escalation risks at a time when both countries are headed by nationalistic leaders. Moreover, recent hostilities complicate the prospects for a peaceful settlement in Afghanistan, the target of assistance by both India and China, as the Trump Administration proceeds to withdraw from the country.

Mediators are few and far between. The U.S. has been seeking closer ties to India as tensions in Sino-American relations mount. Although in recent remarks Secretary of State Pompeo said the United States hoped for a peaceful resolution to the Sino-Indian border issue, he sided with India after the June 2020 clashes, criticizing China for taking "incredibly aggressive action."

Russia might be a likely mediator and thus far has has remained neutral about the dispute. With its two closest partners at odds, Russia finds itself in an awkward position. Although Russian officials have encouraged dialogue to diffuse tensions, the Russian Defense Ministry sells S-400 missile systems to both countries, which could potentially be used in their disputed border regions. After the June clashes, Moscow agreed to speed up delivery to India, which is set to receive the system in 2021. By contrast, delivery to China was suspended in July 2020, supposedly due to COVID-19, but potentially in retaliation for Chinese spying activities against Russia.

In addition to the risk of broader conflict, the underlying race to develop mines and expand infastructure in and near the disputed Sino-Indian border areas presents many social and environmental risks. The Lhunze mine, for example, is located near the headwaters of the Brahmaputra/Yarlung Tsangpo River, which provides water for 630 million people in Asia. Although Huayu pledged to operate a "green" mine and minimize its environmental impact, frequent earthquakes in the area may cause toxic leakage which could pollute the Brahmaputra and then flow into the Ganges. Pollution from mining in Tibet has been a persistent problem, leading to protests from affected communities.

Tibetan activists further argue that the development of mining has the strategic aim of providing a rationale for the in-migration of large numbers of Chinese migrant workers to border regions primarily populated by Tibetans. Lhunze county, for example, was 99% Tibetan in 2010 with a population of 35,248, but once the gold mine began operations migrant labor began pouring into the area, creating a mining boomtown. From the Chinese government's perspective, attracting Chinese migrants to the border area only reinforces the country's sovereignty claims. Tibetan grasslands are also extremely fragile and efforts by the Chinese government to resettle Tibetans and develop mines and other industries only accentuates the degradation of the land, according to the United Nations' Intergovernmental Panel on Climate Change (IPCC).

Tibet, known as the "third pole" because it holds the third largest number of glaciers after the Arctic and Antarctic, is facing unprecedented environmental stress. As a result of human activity, glaciers on the Tibetan plateau are disappearing, potentially provoking a water crisis for the 1.6 billion people dependent on the seasonal ice melt that flows into Asian rivers. Despite this looming catastrophe, India and China are also competing to control the region's water supply, by building dams on the Brahmaputra.

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