London Calling Agarwal to account (yet again)
Virtually disregarded by the press at large, heavily-indicted UK mining company, Vedanta Resources plc, has applied to India's Ministry of Environment and Forests (MoEF) to enormously expand its much-condemned Lanjigarh alumina refinery in Orissa. True to his incorrigibly hubristic nature, Vedanta executive chairperson, Anil Agarwal, aims to increase the plant's current production capacity from a million tonnes a year to an astonishing 6 million tonnes. This would translate into around 3 million tonnes a year of smelted aluminium - more than double India's entire output of the metal in 2007!But that isn't all. Last month, Agarwal signed an MOU (Memorandum of Agreement) with the Chief Minister of West Bengal state, presaging construction of a coal-fired power plant to run a smelter spewing out 6 million tonnes of aluminium - equivalent to quadruple the country's output last year.
Canning aluminium's canny czar
One might be permitted a heavy dose of scepticism that Vedanta will be able to raise the finance required to fulfill both these objectives. Nor is it at all likely that the company would find an internal market for such a huge amount of aluminium in India itself, within the short space of time projected for both projects' completion. Despite Agarwal's longstanding boast that he'll make Vedanta the world's biggest metals miner, he's aware of the many obstacles that stand in his path. However, massive hype goes hand in hand with the distasteful practices for which the man has been responsible since Vedanta listed on the London Stock Exchange in late 2003.
Even as it seems likely that India's Supreme Court will grant Vedanta's subsidiary, Sterlite Industries India Ltd, entry to the bauxite-rich Nyamgiri Hills, last week the company was indicted by the Orissa pollution control board for contaminating the main river adjacent to the Lanjigarh refinery.
In late March, representatives of London-based Nostromo Research inspected both the river and its adjacent Red mud pond. The two-person team was horrified to discover that Vedanta is now hastily completing "construction" of a second, even larger disposal area for the caustic soda, iron oxide and other wastes disposed of from the refinery - thus threatening a huge addition to the existing pollution of the Vansadhara river. It's not clear whether the MoEF has in fact granted a permit for this expansion; in any event excavation of the second pond has already resulted in the felling of a significant number (around two dozen) of large, old-growth trees.
Proceeding regardless of the law - and then seeking a retrospective "permit" for the damage done is Vedanta's par for the course. It did so when enlarging its Tuticorin copper smelter in Tamil Nadu during the past few years; and again, after illegally encroaching on forest land for its aluminium smelter in Jharsaguda (also in Orissa.)
And it may also violate earlier legislation and a Supreme Court order of 2002, if it proceeds with construction of yet another smelter complex in West Bengal.
London Calling will keep its readers posted as these events unfold.
Meanwhile, Vedanta’s key investors (which include Standard Life and Barclays) should recognize that Vedanta’s rocketing ascendancy into the firmament of global miners might soon turn out to be a distinctly sodden squib.
Vedanta refinery may lose ground for growth
Orissa pollution board has found that the company's waste water has contaminated the Vanshadhara river as well as local groundwater
Padmaparna Ghosh , Livemint
19th APRIL 2008
New Delhi: The proposal by Vedanta Alumina Ltd for a sixfold expansion of its alumina refinery at Lanjigarh, Orissa, which is predicated on the company adhering to environmental safeguards, could be derailed following the findings of the Orissa State Pollution Control Board, the apex pollution control authority for the state, after a routine inspection of the plant’s existing facilities.
The board has found that the company’s waste water has contaminated the Vanshadhara river as well as local groundwater, which is accessed by residents of neighbouring villages.
The inspection report of the board, dated 29-30 January, concludes: “The industry (the Vedanta factory) has not taken adequate steps on the problems identified by the Board officials during their visit to the industry from 2nd to 4th November, 2007. It has also not complied (with) the points specified in showcause notice and directions issued by the Board.”
Late Thursday, the company emailed a statement in response to Mint’s questions.
“The VAL refinery has all the clearances required and is currently in trial production. The pollution control board and the company are in constant dialogue and all the action mutually agreed are being implemented in time. There is obviously a huge misinformation campaign, which you are aware of, to keep economic activity out of backward regions like Kalahandi to keep these regions permanently backward,” according to C.V. Krishnan, head of business development of Sterlite Industries India Ltd, an associate company of Vedanta.
The statement did not address the specific findings of the board’s report. The Vedanta factory has been in operation since October 2006.
The board’s findings are important because Vedanta has applied to the ministry of environment and forests for a sixfold expansion of the same refinery, from current capacity of 1 million tonnes per annum.
Another 1,343.20ha of land will be required for the expansion, taking the total land area under the project to 2,007.72ha.
The ministry’s expert appraisal committee, which oversees environmental clearances, has issued detailed terms of reference to the company, based on which Vedanta has to commission an environmental impact assessment of the expansion. Total cost of the expansion is pegged at Rs6,500 crore, of whichRs145 crore is earmarked toward environmental pollution control measures.
The application for the expansion says that waste water will be recycled and reused and hence no waste water will be discharged outside the premises.
Additionally, Vedanta has said that “wet” waste generated in the manufacture of alumina, or the so-called red-mud pond, will be treated and reused.
However, the board has found Vedanta wanting on both issues.
Even if the ministry were to sign off on the proposal, Vedanta’s expansion plans will depend on whether an associate company, Sterlite, will get the go-ahead from the Supreme Court to begin mining of bauxite, the basic raw material for manufacture of alumina, in the neighbouring niyamgiri Hills.
Both Vedanta and Sterlite are wholly owned subsidiaries of London-based Vedanta Resources Plc., which is controlled by billionaire Anil Agarwal.
Activist groups welcomed the findings of the board.
“A few villagers from Chhatrapur village have lost livestock and a few people have got skin infection because of bathing and while crossing the streams, which are polluted,” said Bratindi Jena, a member of Sachetan Nagrik Manch, an Orissa-based forum.
“That is why they are protesting regularly at the company gates. And, now that the (board) has come out with its observation report, you know it is true.” Jena said local villagers have been protesting against leaking water pipes from the alumina plant, which are affecting local water streams, for about two months.
In its report, the board observed that the red-mud pond has not been constructed as per design specifications and there is clear indication of groundwater contamination in the area. The report says the seepage from waste ponds is alarming and is expected to further deteriorate, when the plant goes into full production. The plant is currently operating at 30% capacity.
“Red-mud treatment and disposal is critical for aluminium industry. It has a toxicity level and needs to have proper management plans for disposing and treatment. The main problem arises because it is generated in huge quantities, it is a serious concern. But, every alumina plant has to have this plan and expenses are not a question here. Nevertheless it is a simple enough procedure, which doesn’t require a lot of expertise,” said a ministry official who didn’t want to be named.