MAC: Mines and Communities

South Asia update

Published by MAC on 2007-04-21

South Asia update

21st April 2007

Farmers are refusing to sell their land for Tata's steel plant in Chhattisgarh, while opposition to POSCO's proposed massive iron ore project in Orissa mounts even further - and across the board.

India's Essar Steel - the country's third biggest company in the sector - has taken over Algoma, Canada's own third biggest steel producer.

A cogent analysis of the draft National Rehabilitation Policy dubs it a "Draft National Displacement Policy".

A major editorial in leading Indian newspaper, The Hindu, examines a leaked report on the implications of climate change for south Asia, and criticises India's existing minerals policy.

Tata Steel plant faces obstinate tribals

Times of India

19th April 2007

LOHANDIGUDA (CHHATTISGARH): A proposed Tata steel project in Chhattisgarh's Bastar region has run into rough weather, with farmers refusing to sell their ancestral farmland.

"Earlier we had sought a hike in compensation for surrendering our prime farmland to the Tatas. Now we have decided not to give up the land at any cost," thundered Banga Ram, 52, of Badeparoba village. "Tata Steel," Ram told news agency, "can get the land (only) over our dead bodies."

Badeparoba is one of the 10 villages of Lohandiguda block in Bastar district where officials say Tata Steel plans to acquire about 5,098 acres of land. Of this, 3,500 acres are private land.

The company signed a deal with the Chhattisgarh government in June 2005 for investing Rs.100 billion for a five million tonne per annum (mta) steel plant in a region home to large stocks of the world's finest quality iron ore.

The government sent a recommendation to the central government in February to grant a prospecting license for the 2,500-hectare stretch in Bastar's Bailadila deposit no-1 to Tata Steel to fulfil its iron ore requirements.

Local legislator Lachhuram Kashyap of the ruling Bharatiya Janata Party (BJP), who was till January welcoming Tata Steel's decision for choosing Lohandiguda block for a mega plant, has now started opposing the project.

Tata's Bhopal

[Ratan Tata, eminence grise of the eponymous company, has offered to bail out Dow Chemicals (successor to the notorious Union Carbide) over remediation costs for the Bhopal disaster. In response, Major General Vombatkere raises the question whether some sort of quid pro quo might have been arranged between the central government and Tata.]

From: Maj General S.G.Vombatkere, VSM (Retd), Vijayanagar, Mysore

To: Mr. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission New Delhi

20 April 2007

Dear Mr. Montek Singh Ahluwalia,

The motives behind Tata Sons Ltd. Chairman Mr. Ratan Tata's offer to organize a clean-up of the contaminated Union Carbide factory site in Bhopal have been exposed in his personal letter dated 28 Nov 2006 addressed to you. As you are aware, expressing his support to Dow Chemicals (the corporate successor of Union Carbide which is a proclaimed criminal absconder in the Bhopal Court), Mr. Ratan Tata wrote that it is "critical for them [Dow Chemicals] to have the Ministry of Chemicals and Fertilizers withdraw their application for a financial deposit by Dow [Chemicals] against the remediation cost" for the contaminated site as it "implies that the Government of India views Dow as 'liable' in the Bhopal Gas disaster case".

Everybody knows that Union Carbide, and thus its corporate successor Dow, is liable for the industrial disaster, and the basis for Mr. Ratan Tata's implication regarding Dow's liability is therefore ill-founded.

In any case, Mr. Ratan Tata's extra-legal efforts to save Dow from liability for the Bhopal disaster that has killed 20,000 people since 1984 and rendered drinking water near the factory poisonous, is not in the best interests of the victims of the Bhopal gas tragedy. It raises doubt whether, as Chairman of the US-India CEO Forum, he is under pressure from US industry, especially since his letter to you follows Dow Chairman & CEO Mr. Andrew Liveris's letter dated 08 Nov 2006 to Indian Ambassador Mr. Ronen Sen in Washington, in which Mr.Liveris has the temerity to suggest what the Indian government needs to do, writing that "GOI [government of India] and the state government will need to work with the Court over-seeing site clean-up to assure that this effort will pass legal muster as the site's final remediation plan".

No doubt you would have been briefed by Mr. Vipul Shah of Dow India on the matter, as mentioned in Mr. Ratan Tata's letter.

When the High Court of Madhya Pradesh is apparently of the opinion that Government of India and Government of Madhya Pradesh should bear the cost of remediation equally, Tata Sons Ltd. offering to pay for remediation suggests a quid pro quo at some level. This does not, of course, mean that the shareholders of Tata Sons might approve such expenditure.

As you know, the Bhopal disaster has killed 20,000 people since 1984 and rendered drinking water near the factory poisonous. Mr. Ratan Tata's offer to clean-up Bhopal undermines the "Polluter Pays" principle of environmental law in India and sabotages the effort by the Ministry of Chemicals and Fertilizers to fix responsibility on the corporation that has caused such immense loss and suffering. The Ministry of Chemicals and Fertilizers has consistently taken its duty to the citizens of Bhopal seriously, and it would be tragic if they were forced to succumb to the pressure generated by Mr. Ratan Tata's initiative through your office.

As Deputy Chairman of the Planning Commission, may I suggest that it is necessary for you to have taken action to prevent miscarriage of justice in a matter that is patently against the best interests of the victims of the Bhopal gas tragedy. Since the correspondence is of six months ago, you may have already taken action in the matter. I therefore request you to immediately issue a press statement as to whether or not you have supported the cause of Dow Chemicals in this matter.


Tata's investment proposal not 'positive', says Tapan
Staff Correspondent, NewAge

16th April 2007

Power and energy adviser Tapan Chowdhury on Sunday said that the Tata Group's investment proposal was not 'entirely positive' and the government did not agree with several aspects of the proposal. He, however, felt that the government should take a decision on the group's investment proposal within 3-6 months.

'There are many problems in the investment proposal. The incentives including the gas price that Tata wanted were not realistic. We have to review every aspect of the proposal before taking a final decision,' he told reporters.

Tata has been awaiting the government's approval for the more than $3 billion investment proposal to set up steel, fertiliser, power and coal plants.

Tapan said Tata should be informed of the problems that are present in their proposals.

The adviser said the file on the investment proposal was now pending with the chief adviser.

'It is not right that any big investment should get extra incentives. Tata wanted guarantee of continuous supply of gas for a long time. But we have gas that will last till 2012 if we do not explore and find any new gas-fields,' he said.

He, however, favoured fresh negotiations with Tata which will based on the report and suggestions of a secretary-level committee that has studied and assessed the proposal.

Sources in Petrobangla as well as in the Energy Division feel that even the price formula fixed by the secretary-level committee under the BNP-Jamaat government was not appropriate as the suggested gas price for Tata plants would be much lower than the price in the international market. They pointed that India was going to sign a gas import deal with Iran and the total cost of gas, including transmission cost, would be over $7 at present, whereas, according to the BNP-Jamaat government's secretary-level committee's suggestion, the gas price for Tata would be only around $2-$3.7 for its power, steel and fertiliser plants.


HC blow to Posco move

Statesman News Service

BHUBANESWAR, April 16: The state government's move to provide iron ore lease by way of a special recommendation in favour of Posco has run into trouble with the Orissa High Court asking the Central government to hear all parties, including KIOCL's claims for the mines and dispose the matter preferably within three months.

A Division Bench comprising Chief Justice Mr Justice Ashok Kumar Ganguly and Mr Justice Nityananda Prusty passed the order while disposing writ petitions filed by KIOCL, a Central PSU and said it was not going into the merits of the case. Objections filed by KIOCL with the Centre earlier and any further objections that it wanted to file are to be treated as revision by the Central government and all parties before the court, Posco, state government and KIOCL, heard while disposing the matter, stated the court.

Kudremukh Iron Ore Company Limited (KIOCL) had initially filed a writ when it received a communication from the government as to why it had not set up a proposed pelltisation plant and asking it to put such plans on hold. KIOCL responded by saying that it was awaiting grant of mining lease.

The KIOCL filed objections with the Central government when the state made a special recommendation for Khandadhar mines in favour of Posco. Since KIOCL's application for the same mine was pending since long it filed objections and subsequently moved the High Court challenging the special recommendation made by the state government. Effectively now, the Centre has to hear KIOCL's contention for the mines before taking any decision on grant of mining licence. The significance of the order stems from the fact that as per procedure, there was no scope for revision or hearing at the Central government level once the state had made a special recommendation in favor of a particular company. Earlier, on 26 February, the High Court ordered the status quo on grant of prospecting licence for Khandadhar iron ore reserves after KIOCL filed the petition.

KIOCL had filed the petition on the basis of preferential rights for allotment of mining lease as it had applied since 2002 and had spent Rs 2 crore when the directorate of geology took up prospecting work.

Posco had become an intervener in the case while the state government had contended that KIOCL's application was taken into consideration as the PSU had failed to make any headway in setting up its proposed Rs 700-crore plant in the state over a period of time. It also submitted that Posco's application was forwarded to the Centre for approval as it was prepared to make a sizeable investment by setting up a steel plant.


KalingaTimes Correspondent

16th April 2007

Bhubaneswar: Four non-Congress Opposition parties of Orissa on Monday sought the intervention of Prime Minister Manmohan Singh to prevent any untoward incident in the POSCO project area in the State's Jagatsinghpur district.

In a memorandum to the Prime Minister, the Communist Party of India (Marxist), Communist Party of India, Orissa Gana Parishad and Janata Dal (S) submitted that the Naveen Patnaik Government had created a war-zone like situation in the project area by making heavy police deployment during the past few days.

"We protest the misplaced notion of the Naveen Patnaik-led government that equates sustainable development with forced land grab to promote industrial growth," they said.

The four senior leaders who signed the memorandum are Janardan Pati of CPI (M), Bijay Mohapatra of OGP, Nityananda Pradhan of CPI and Krushna Chandra Patro of JD(S).

They said deployment of massive police force in the area where land had been designated for the Korean firm's proposed steel mill had triggered fear in the minds of the local who were against opposing the project.

"Amidst tension, the villagers suspect that there could be tragic repeat of brutal action against them as happened earlier in Kalinga Nagar," they said.

The leaders submitted that the State Government seemed to gearing up for use of force to acquire land for the POSCO project despite the Centre's stand that force would not be used for acquiring land for SEZ areas.

Observing that they were not opposed to industrialisation, the leaders said that "industrialisation should not be at the cost of the people".

They demanded that the project should be shifted to a barren stretch instead of allowing it to come up in lush green fertile agriculture land. ActionAid urges government to intervene on POSCO issue As women in three Orissan panchayats guard barricades to protect their villages, anti-poverty agency ActionAid is calling on central government to prevent the state from violating environmental guidelines and denying local people a voice in a hearing on projects proposed by Korean steel giant POSCO which are set to displace seven villages.

The Naveen Patnaik government in Orissa signed a memorandum of understanding in June 2005 with POSCO to set up an export-oriented 12 million tonne a year steel plant and marine port at Jatadhar river mouth near Paradip in Jagatsinghpur district. A public hearing on the case, a legal requirement, has set for April 15.

ActionAid, which has been working with fishing communities, dalits and other marginalised groups in the area since 1999, wrote to the central Ministry of Environment and Forests on April 5, 2007 requesting that the public hearing be postponed and local people are given the mandatory one month to go through documents before the meeting.

"There are grave concerns over the POSCO public hearing. Not just over failure to disseminate the necessary information to those affected, but also on the choice of venue which is too far from the affected villages and will prevent many local people taking part," says Madhumita Ray, programme manager with ActionAid's Bhubaneshwar office.

The latest Environmental Impact Assessment (EIA) notification by government of India dated 14 September 2006, lays down in detail procedures the State Pollution Control Board should follow in arranging a public hearing. State authorities are liable to share the draft EIA report with affected communities in advance of the public hearing but it has not yet reached the three panchayats concerned.

The EIA guidelines also state that the public hearing should be arranged "for ensuring the widest public participation at the project site or in its close proximity." With plans to hold the hearing 25 kilometers away in Kujang, the guidelines are clearly being flouted.

"The venue for public hearing is 20-25 km away from our village. If we attend the hearing it would mean losing a day's work and Rs 50-60 on commuting," explains a woman from one of the affected villages who spoke to ActionAid.

ActionAid's Ray says foul play cannot be ruled out: "A public hearing should be conducted in a systematic and transparent manner ensuring widest public participation. Such disregard of due process at best points to ignorance of official procedure and at worst, connivance between the state government and POSCO to manufacture consensus without the consent of those affected."

As the date of the public hearing draws closer, there is also growing anxiety among villagers after an estimated 1000 police are stationed at the venue of the public hearing following a sudden visit of a team of high-ranking police officials a couple of days back headed by the Director General.

"Large numbers of police are marching around the area. We have said we do not want POSCO here. Are they planning to use force to move us or silence us?" asks a villager who spoke to ActionAid and does not want to be named.

Killings over land disputes in Orissa's Kalingar Nagar in January 2006 and Nandigram in the neighbouring state of West Bengal last month are still fresh in people's minds.

ActionAid and local groups are concerned that if the POSCO project goes ahead, a vibrant agrarian and fishing economy where people grow two paddy crops a year and women often earn an income from bamboo cane and livestock rearing will be destroyed.

"Clearance for the project would not only mean the loss of homes and livelihoods but would also play havoc with estuarine ecosystems, protected forests and the migratory path of endangered Olive Ridley turtles," says Ray.

"POSCO will be a poor alternative for farmers who will turn into labourers in their own fields."

The POSCO project would bring a total of 5,20,000 million rupees, the highest ever Foreign Direct Investment in the country and requires as much as 4,004 acres of land to be acquired at the project site.

The Memorandum of Understanding between the Government of Orissa and POSCO allows POSCO to exploit the best of the coal and iron ore mines of the State for a period of 30 years and to construct their own railways, roadways and an 86 km long pipe-line for carrying fresh water from Mahanadi barrage at Cuttack to salinity-prone project site at Jatadhar mouth.

Project plans involve displacement of seven villages from three panchayats. Protests by local people have been going on for the last 14 months. Villagers have erected guarded barricades to prevent state authorities or company personnel from entering their villages.

For more information or to arrange interviews please contact:

Madhumita Ray, Programme Manager, ActionAid Bhubeneshwar office: 09437 052 961Pragya Vats in ActionAid's media team in Delhi: 09868 424 692


1. The Ministry of Environment and Forests, government of India should immediately enquire into the circumstances and motives behind violation of the norms of EIA Notification 2006 by the Orissa State Pollution Control Board and other concerned authorities entrusted with the conduction of Public Hearing Process relating to draft EIA Reports for POSCO.

2. The Board and all other authorities concerned with Public Hearing Process should ensure availability of full and summary texts of POSCO EIA Reports through hard and soft copies (in both English and the local language Oriya) and also through their respective websites, so as to enable the public to review the documents.

3. In view of the non-compliance of the EIA norms for public hearing by the concerned authorities including State Pollution Control Board, the proposed date of 15th April for public hearing should be postponed.

4. The District Collector Jagatsinghpur should withdraw his provocative letter dated 30th March issued to several leaders of affected panchayats who were targetted, and ensure they receive all draft EIA Reports, along with maintenance of a cool and peaceful environment in the concerned villages to enable effective participation of villagers in the public hearing process.

5. The Chief Minister of Orissa should take action to ensure that all the concerned authorities of state government fully comply with the norms laid down in the EIA Notification 2006, so as to ensure a proper conduction of the public hearing process relating to POSCO proposed projects.

ActionAid End poverty. Together.

ActionAid is an international anti-poverty agency working in over 40 countries, taking sides with poor people to end poverty and injustice together.

Now, Posco faces ire of environmentalists

Money Control

17th April 2007

After the South Korean steel giant Posco had faced land acquisition and SEZ problems, it is now up against environmentalists, reports CNBC-TV18.

A public hearing and public outcry.

This is a public hearing organised by the State Pollution Control Board on Sunday to air grievances against Posco's project on environment pollution. Most of the 50 families living in the affected eight villages did not attend, but those who did, protested.

Sankhananda Behera, protestor, says, "The State Pollution Control Board is hand in glove with the industrialists. The Paradeep Port violates environment laws and no action is taken. We don't expect a fair deal in the case of Posco. So, immediately stop this hearing, it is just an eye wash."

Posco has proposed a Rs 51000 crore 12-million tonne steel plant over 4000 acres at this site near a proposed Jatadhari Port. Local people and environmentalists fear both, the plant and port will lead to water scarcity, crop loss, fishing scarcity and industrial pollution. The State Pollution Control Board will appeal for a revision of the project report. But Posco is still hopeful.

Sasanka Patnaik, spokesperson, Posco India says, "The people here want direct dialogues with the Posco officials. We welcome this and are ready to talk to them on all issues. We will definitely be successful in setting up the plant here."

There's tension at the proposed site as four opposition parties including the Congress, CPI(M), JD (S) and Orissa Gana Parishad campaign to mobilize public opinion against Posco. Chief Minister Naveen Patnaik will meet the Prime Minister on 19th as the people wait and watch. Politicians and corporates will want to prevent a public outcry.

Naveen reluctant to use force to acquire land for Posco project PMO steps up pressure; meeting with Orissa CM this week DILIP

Financial Ezpress

16th April 2007

BHUBANESWAR: Even as the Prime Minister's Office (PMO) is piloting South Korean steel major Posco's $12 billion project in Orissa—the biggest foreign direct investment—with great fervour, the state government is in a bind, as it is under tremendous pressure to make way for the grounding of the project near the port town of Paradip in Jagatsinghpur district.

The fate of the 12 million tonne Posco steel project is hanging in balance for over a year as the government is finding it difficult to acquire the required land because of violent resistance by locals facing displacement. Badly bitten by the Kalinganagar and Nandigram incidents, the Orissa government is in no mood to use force for land acquisition.

Realising that the project is not moving as per schedule (it is already delayed by six months) Posco's top executives are impatient and have started giving signals of withdrawing. Posco, which signed an MoU with the state government on June 22, 2005, is yet to take possession of even an inch of land at the proposed site.

Fearing that the FDI may fly away from the country, the PMO has intensified its monitoring of the project's progress. Last month, the PMO had a meeting with Orissa chief secretary, Ajit Tripathy, and elicited a promise that land acquisition would be completed in three months. The PMO has called a meeting with chief minister Naveen Patnaik on April 19, next.

Goaded by the Centre, the Orissa government has, of late, initiated measures to acquire land for the project risking its political popularity. The government has mobilised the police force on site to put pressure on the resistance movement.

Last week, there was a face off between the police and activists of the movement.

Apprehending that the police and 'hired goons of Posco' might swoop down on their villages for forcible eviction, the anti-Posco activists have reinforced their check gates that prevent entry of government officials into the site. The cadres of Navnirman Samiti, the organisation that is spearheading the movement, have already held preparatory meetings in Nuagoan, Gadaakujanga and Dhinkia, the villages that will be affected by the project. ''We are prepared to face bullets, because we will not forsake our source of livelihood for the steel plant'', over 10,000 women resolved last Sunday.

Meanwhile, Navanirman Samiti spokesperson, Akhyaya Kumar, has urged the government not to create situation that will lead to incidents like Kalinganagar and Nandigram.

The resistance movement got a shot-in-the-arm with former chief minister and leader of the Opposition, JB Patnaik, rallying behind them. Patnaik said last week that he would oppose acquisition of agricultural land. He cautioned the government against forcible displacement of people.

State police director-general, Amarananda Patanik, however, said that force would not be used to evict people from the project site. ''We will try our best to convince the villagers to make way for the project'', he says.

Orissa steel and mines minister, Padmanabha Behera, also said that problems would be sorted out through dialogue. The Jagatsingpur district administration has been engaged in negotiations with anti-Posco activists. He clarified that the police force has been deployed 15 km from the site with a view to maintaining law and order.

Given the tone of its spokespersons, the Naveen Patnaik government is unlikely to use 'real' force to evict villagers, despite the UPA government pursuing the Posco project with great zeal.

Blood Money: U.S. Bank Funds Korean Project That Will Destroy Native Community

By Daphne Wysham, AlterNet

21th April 2007

Do the money managers not know that poor villagers are being detained, beaten and even killed to protect their investments? Or do they not care?

"When you share love's warmth, it returns even warmer. Together we can move the world." So says the website of the South Korean-based Pohang Iron and Steel Co., or POSCO, an image of two beaming children and a bucolic mountain backdrop framing the message. American investors are among those sharing in the "warmth" of POSCO's profits, up 44 percent in the first quarter.

POSCO, the world's fourth-largest steel company, has apparently fooled many U.S. investors into believing this saccharine façade: The Bank of New York, a U.S.-based investment firm, is POSCO's trustee and largest shareholder, holding 22 percent of its shares. Another U.S. investment firm, Capital Research & Management (Capital Group Companies), one of the world's largest and most publicity-shy investment management companies, is No. 2, with a 4.4 percent share in POSCO.

Yet POSCO has been accused of marshaling police who jailed and beat striking union members -- one to death -- in its home country of South Korea, and it now stands poised to engage in even more violent tactics in India's eastern state of Orissa.

There, in the coastal village of Jagatsinghpur, farmers have railed against eviction orders for the past 22 months. Today, over 1,000 Indian officers -- 20 platoons -- of state police have encircled the villages where the POSCO site is planned in an attempt to repress the growing resistance. Farmers have formed "self-sacrifice squads" -- 500 men and women are prepared to die rather than move. Today, the Jagatsinghpur villagers have barricaded themselves behind bamboo fences in a desperate bid to protect their land.

In recent months, over 15 people were killed after police fired on protestors refusing to move to make way for an Indonesian chemical plant in Nandigram, West Bengal. Like the proposed POSCO site, the Nandigram village was one of hundreds of Indian "special economic zones" -- or SEZs -- neoliberal dreamlands where land rights, environmental and labor protections, and other laws are all but eliminated to attract foreign investors.

Similar massacres have taken place in SEZs in Kalinganagar and Kashipur, also in Orissa, and elsewhere. It is for this reason that the Jagatsinghpur villagers are demanding the immediate removal of the paramilitary forces and police from the vicinity of the proposed POSCO site, says Debjeet Sarangi from Living Farms, an organization working with farmers on sustainable agriculture in Orissa. And, he adds, they are asking for solidarity in their call that no project should proceed against the wishes of the local people.

The $12 billion POSCO project in Orissa is the largest foreign investment project ever in India. POSCO plans to take over 8,000 acres of fertile farmland to build a massive steel, automobile and ship-building complex, complete with its own power plant and port, displacing over 30,000 people. The POSCO project is the largest in the history of South Korea's overseas investment.

POSCO is very likely viewing its new operations in Orissa as a way of escaping pressures from unions for higher wages and better working conditions in its home country. At a strike at a South Korean POSCO facility in July 2006, one union member, Ha Joong Keun, was beaten to death by riot police, another suffered a miscarriage and scores of others were injured as a result of police brutality. POSCO used its political and economic clout to shut down the Pohang Construction Local Union affiliated with the Korean Federation of Construction Industry Trade Unions (KFCITU) during the strike. Approximately 25 Korean union members still languish in jail: Their crime, demanding a livable wage and a 40-hour workweek from POSCO.

The Orissa state government claims that it has already acquired 1,100 acres from their owners. Their government's environmental impact assessment claims that "89 percent" of the land is government-owned and only 11 percent is occupied. But that claim is visibly and historically false. Decades ago, villagers purchased land ownership rights from their king. Today, their descendants, mostly tribal farmers, have made their homes and livelihoods in the rich soil near the coast, growing betel nut and cashew crops. A 1956 law strongly restricts the sale of tribal lands to nontribals. In a bid to open up Orissa's vast mineral wealth to foreign investors, the state government is trying both to undo that law and dispute the ownership rights that date back decades.

POSCO has already invested $6.2 billion in the Orissa project, roughly equivalent to its profits in 2005, one year before striking Korean workers unsuccessfully demanded higher wages. BHP Billiton Ltd. of Australia, the world's largest mining company, has invested another $2.4 billion.

These corporations and their investors have a larger stake in POSCO's profits than their Korean peers; for example, the Korean national pension fund owns 2.9 percent of POSCO shares, South Korean Telecom owns 2.8 percent shares and South Korea's Pohang University of Science & Technology owns 2.7 percent. The remainder of shareholders in POSCO are small mutual funds, primarily based in the United States and Luxembourg.

If the police move in to Jagatsinghpur, to lay the groundwork for POSCO's profit-making venture, American shareholders may feel that "warm" feeling of high returns on their investments. What they won't see -- but should -- is the lives destroyed and the blood shed for that growing profit margin.

India's Essar To Buy Canadian Steelmaker

Ruth David, Forbes Magazine

16th April 2007

MUMBAI - India’s Essar Steel has agreed to acquire Canadian steelmaker Algoma for 1.85 billion Canadian dollars ($1.63 billion) in cash, giving it exposure to North American markets as it seeks to expand globally.

“This acquisition fits in with our global steel vision of having world-class, low-cost assets with a global footprint. Algoma provides us with an excellent platform for the Canadian and North American markets,” said Shashi Ruia, chairman of the holding company Essar Global.

The offer price of C$56 ($49) per share is 3.5% higher than Algoma’s closing stock price Friday. It’s also a premium of 48% to Algoma’s volume weighted average stock price for the 20-day period ending on Feb. 14, when the Sault Ste. Marie, Ontario-based steelmaker confirmed it was in talks that could result in a takeover, the companies said in a statement.

Algoma said that if shareholders approve the deal at a meeting in June, it will be completed shortly thereafter. Germany’s second-largest steelmaker, Salzgitter, terminated takeover talks with Algoma last month.

Essar Steel, which is part of a family owned conglomerate ranging from construction to telecommunications, is India’s third-largest steelmaker, producing 4.6 million tons a year. In February, it partnered with two local companies to build a steel plant in Vietnam, and it has plans to set up three plants in the Middle East.

Algoma, the No. 3 integrated steel producer in Canada with a 15% market share, has been through two rounds of court-protected restructuring. It booked C$221 million ($194 million) in net income in 2006 on C$1.94 billion ($1.7 billion) in revenue.

The deal is the latest in a wave of consolidation in the steel industry in which Indian companies have been active. India’s Tata Steel acquired Anglo-Dutch steelmaker Corus for $11.3 billion in January.

Rising demand for steel in fast-growing India and China, as well as in the U.S., has allowed steelmakers to raise prices globally.

The Indian government estimates domestic demand for steel will grow at over 10% in the next few years as it invests hundreds of billions of dollars to ramp up infrastructure.

Algoma joins ranks of foreign-owned firms BOYD ERMAN

Toronto Globe and Mail

16th April 2007

First the operators of nickel mine and luxury hotels vanished from Canada's business landscape, now it is the steel industry's turn to go, and the quickening pace of head office disappearances is raising concerns that the country is approaching a point of no return.

With Algoma Steel Inc. agreeing yesterday to be bought by India's Essar Global Ltd. for $1.85-billion, Canada will soon be down to only two steel makers. And one of those, Ipsco Ltd., is also in talks to be sold.

Last week, a court approved the purchase by Bill Gates and a Saudi Arabian Prince of Four Seasons Hotels Inc., which will soon follow Fairmont Hotels & Resorts Inc. into the sunset. Nickel miners Inco Ltd. and Falconbridge Ltd. have already been subsumed into foreign parents, and even smaller producer LionOre International Mining Ltd. has now agreed to be bought.

For years, such takeovers of Canadian companies were offset or even outweighed by Canadian firms making purchases abroad.

But with so many large Canadian companies gone, the risk now is that a "spiral effect" takes hold because "each company that is acquired is no longer a company that can acquire for us," said Kenneth Smith, the Toronto managing partner for Secor Consulting.

"The trend [of hollowing out] will accelerate because of the spiral effect, then you have to look at how does it change our cities," said Mr. Smith, who has studied the phenomenon. "These office towers are full of two kinds of folks, generally. People who work at company HQs and people who work at the law firms, accounting firms and investment banks who support those HQs."

Canada's steel industry began to attract bids years ago. Maverick Tube Corp. of the U.S. snapped up Calgary's Prudential Steel Ltd. in 2000, and in 2002, Toronto's Co-Steel Inc. merged with a Brazilian company.

But in the past 18 months, another surge of global mergers doomed the last of Canada's steel makers. Producers in India, Russia, Brazil, Europe and the United States moved faster and more aggressively than those such as Canada's Dofasco Inc., which went on much as they had for decades -- as small players with few growth ambitions.

Dofasco, the pride of Canada's steel sector, was sold to European giant Arcelor SA. Then Arcelor was bought by India's Mittal Steel to form the largest producer in the world.

"I think the Mittal-Arcelor transaction changed everything," said one investment banker who specializes in the steel industry. "When that happened, you could just see the dominos start to fall."

Rival players were left scrambling to keep pace, and in the process have been devouring competitors in both Canada and the United States. Even Stelco Inc., weighed down with problems, is viewed as a takeover candidate.

The banker said that while Canada has produced some innovative companies in the steel industry, none have had the necessary size to hatch their own acquisition plans and become world leaders.

"Putting patriotism aside, I look at the business fundamentals," the banker said. "Even a Dofasco, which is a marquee player, was not able to play globally."

The story is similar in the nickel industry, where a long-time rivalry between Falconbridge and Inco kept them from combining while the rest of the mining industry went on a consolidation binge. By the time the pair finally tried to merge, it was too late and bigger rivals from abroad were willing to pay more.

"If you look at this story repeating itself -- nickel, steel, perhaps telecom -- and then add up the imbalance if the deals announced so far are done, we'll be $100-billion behind in terms of Canadian companies versus our acquisitions overseas," Mr. Smith said. "If you play that out across industries, that's when it, to me, becomes concerning."

There are still industries where Canadian companies have the heft to fight it out globally, he said.

Uranium, where Cameco Corp. is the world's largest miner, is one.

Telecommunications is another, if BCE Inc. and Telus Corp. were to merge as part of the end-game of the current fight over control of BCE, Mr. Smith said. Canada's banks and insurance companies, too, could compete globally if they were allowed to get big at home first, he said.

Should policy makers decide that Canada is too vulnerable to foreign takeovers, one prescription that those in the business of making deals have suggested is to make it easier for companies to say no to buyers. Currently, Canada is one of the most buyer-friendly jurisdictions on earth, securities lawyers say.

Canada's government may also need to consider enabling more companies to merge at home, even if it means a lessening of local competition, to create global behemoths based here, Mr. Smith said.

[With a report from Sinclair Stewart]

A critique of draft National Rehabilitation Policy 2006

Posted by: "CGNet"

19th April 2007

Following the killings in Nandigram of West Bengal, displacement because of the Special Economic Zones became the focus in India. Prime Minister Dr Manmohan Singh referred to formulation of a policy for rehabilitation of the displaced persons but failed to give any assurance on the repeal of the draconian Land Acquisition Act of 1894.

Not too long ago i.e. in February 2004, the government of India promulgated the National Policy on Resettlement and Rehabilitation for Project Affected Families. Within two years time, the government of India was forced to issue Draft National Rehabilitation Policy 2006. In its Draft National Rehabilitation Policy 2006, the government of India acknowledged A National Policy on Resettlement and Rehabilitation for Project Affected Families was formulated in 2003 and it came into force w.e.f. February, 2004. Experience of implementation of this policy indicates that there are many issues addressed by the policy which require to be reviewed.

Did the government of India literally gain any experience between 2004 and 2006? It just shows the cavalier manner in which life and death questions of millions of displaced are dealt by the officials.

Does the Draft National Rehabilitation Policy of 2006 address the concerns?

In a nutshell, it can be termed as Draft National Displacement Policy as it only strengthens the procedures for displacement.

I. Preamble

India's Draft National Rehabilitation Policy 2006 (NPR) in its preamble recognizes "traumatic, psychological and socio-cultural consequences on the displaced populations which calls for affirmative State action for protecting their rights", the need for "the active participation of affected persons", "Social Impact Assessment", Environmental Impact Assessment", "the desirability and justifiability of each project", "Tribal Development Plan" etc. The preamble of NRP-2006 promises all happiness a displaced person could desire for. But the promises in the "Preamble" are not reflected in the operative part of the Draft Policy and hence does not provide safeguards.

II. Operative clauses

a. Exclusion of the victims

The call for "the active participation of affected persons" (clause 1.2 of the Draft Policy) in the process of resettlement and rehabilitation is not reflected in the processes of development of the project.

First, the affected persons do not have the right to be consulted prior to finalisation of their lands as the project site. Under Clause 6.1, in cases where displacement is 400 or more families en masse in plain areas, or 200 or more families en masse in tribal or hilly areas, Desert Development Program (DDP) blocks or areas mentioned in Schedule V and Schedule VI of the Constitution of India, the Appropriate Government shall declare, by notification in the Official Gazette, area of villages or localities as "an affected zone of the project".

The affected persons have no say in the process of determination of a project site even if it is on their lands or even if there might be other alternative sites.

The Draft Policy also calls for preparation of Social Impact Assessment (SIA) report and Environmental Impact Assessment (EIA) report by the Requiring Body for all projects (except linear projects) involving physical displacement of 400 or more families en masse in plain areas, or 200 or more families en masse in tribal or hilly areas, DDP blocks and areas mentioned in Schedule V and Schedule VI of the Constitution of India. But there is no provision for inclusion of the affected persons or their representatives while conducting EIA and SIA.

The Draft Policy provides for constitution of a "multi-disciplinary expert group" to examine the SIA and EIA reports. Members are nominated by Central and State governments. There is no accountability, independence and transparency in the process of examination of the SIA and EIA reports.

There is no provision for consultation with the affected families during the final preparation of the SIA and EIA reports prior to their submission to the expert group for examination.

b. Beyond the purview of law

Clause 4.6 of the NRP-2006 gives sweeping powers to the Ministry of Defence to acquire land in connection with national security and the Ministry of Defence is exempted from conducting any Social Impact Assessment or Environmental Impact Assessment. Therefore if a nuclear plant is set up for national interest or defence purposes, no one can oppose it.

The Draft Policy also lays stress on the State's power to "compulsorily acquire any land under the Land Acquisition Act, 1894" by application of the emergency clause of the Act. Clause 6.23 of the Policy provides that "Emergency provisions under section 17 of the Land Acquisition Act, 1894 should be used rarely". Experiences of the application of the Land Acquisition Act since 1894 show that invocation of Section 17 of the Act is the rule and its non-application is a rarity.

c. Lowering the grades of Administrator

Wherever there is large-scale displacement, the Draft Policy provides that the State government shall appoint the Administrator for Resettlement and Rehabilitation, who is an officer not below the rank of District Collector, to oversee the resettlement and rehabilitation plan. But the Administrator for Resettlement and Rehabilitation may delegate his/her powers and duties to any officer not below the rank of Tehsildar or equivalent.

This will seriously affect the rights of the affected persons as an officer of the rank of Tehsildar or equivalent usually does not have the knowledge to understand the magnitude of the problems to oversee the resettlement and rehabilitation plan.

d. Government Commissioner

The Commissioner and the Administrator for Resettlement and Rehabilitation are not independent of the State control. They have been empowered to "take all measures for the resettlement and rehabilitation of the affected families" but are "subject to the superintendence, directions and control of the Appropriate Government".

The Administrator for Resettlement and Rehabilitation performs all his/her powers and functions "subject to any general or special order of the Appropriate Government".

e. Accentuating displacement further

One of the principal objectives of the Draft Policy is to "minimize displacement". Contrary to the objectives, the Draft Policy allows further displacement of non-project affected persons from their land in the process of resettling the project affected families in a particular resettlement zone. Sub-clause (b) of Clause 6.11 states, "If sufficient Government land is not available there, then land may be purchased or acquired under the Land Acquisition Act, 1894 for the purposes of resettlement and rehabilitation scheme/plan".

This implies that the State has the power to evict any body from his/her land in order to resettle the project affected persons. The Draft Policy also states that the State can use its emergency powers under the Land Acquisition Act to evict such people. On the other hand, the Draft Policy is silent on the rehabilitation of these displaced persons from the resettlement zones. This will create an endless cycle of displacement, rather than solving the problem.

One of the functions of the Administrator for Resettlement and Rehabilitation is to "acquire adequate land for the project" (sub-clause (vi) of Clause 5.5). This is in conflict with one of the main objectives of the Policy which states, "To minimize displacement and to promote, as far as possible, non-displacing or least-displacing alternatives" (sub-clause (a) of Claus 2.1). It is clear that the more land is acquired for the project, the more will be the number of the displaced persons.

f. Inadequate safeguards to displaced persons

The Draft Policy fails to provide adequate safeguards to the displaced persons. Under sub-clause (iv) of Clause 6.4, only those project affected families who are/were having possession of forest lands prior to the 25th October, 1980 will be included in the survey of the Administrator for Resettlement and Rehabilitation. In effect, only the affected families, who are/were having possession of forest lands prior to the 25th October, 1980 will be entitled to the benefits of the NRP-2006. This is not in consonance with the Scheduled Tribes and Other Forest Dwellers (Recognition of Forest Rights) Act of 2006, whose cut off date for ownership of land rights is 13 December 2005.

The Draft Policy does not guarantee land for land or adequate lands to the affected families (AFs). Clause 7.4 states that each AF owning agricultural land in the affected zone and whose entire land has been acquired "may be allotted" agricultural land or cultivable wasteland to the extent of actual land lost subject to a maximum of one hectare of irrigated land or two hectares of unirrigated land/cultivable wasteland, "if government land is available". The phrases like "may be allotted" and "if government land is available" give enormous discretionary powers to the governments.

The compensation package is ridiculous. Clause 7.7 of the Draft Policy provides that in case of allotment of wasteland/degraded land in lieu of acquired land, each AF shall get a one-time financial assistance of only Rs 10,000 per hectare for land development. In effect, an AF can get maximum of Rs 20,000 compensation. Also, in case of allotment of agricultural land, one-time financial assistance of only Rs 5,000 per AF is provided. The state governments have been acquiring the lands under the Land Acquisition Act of 1894 and selling these appropriated lands to make profits.

There is little guarantee for employment for the oustees. According to Clause 7.11, employment will be provided by the Requiring Body only to those affected families who have lost their employment due to the project. Also, such employment will be "subject to availability of vacancies and suitability of the affected person for the employment". Clause 7.12.1 states that Affected Families who have not been granted employment or agricultural land shall be entitled to a rehabilitation grant equivalent to 750 days minimum agricultural wages.

There is absolutely no rehabilitation for PAFs displaced by linear acquisitions. According to Clause 7.15, the victims of linear acquisitions in projects relating to railway lines, highways, transmission lines, laying pipelines etc, will not be entitled to any resettlement or rehabilitation package. They will be offered an ex-gratia amount of Rs.10,000 only.

g. No adequate safeguards for STs/SCs

According to the definition of "affected family" as provided in sub-clause (s) of Clause 3.1 of Chapter III, the affected family, among others, must have been "residing continuously for a period of not less than three years preceding the date of declaration of the affected zone". Tribals who practice traditional mode of agriculture, such as shifting cultivation which requires temporarily shifting from one place to another place every year for cultivation of crops, and other nomadic forms of life, may not be "residing continuously for a period of three years" at a particular place and hence may not come under the strict definition of "affected family" to get the benefits under this Policy.

The Draft NRP-2006 has dealt with displacement of Schedule Caste and Scheduled Tribe families separately. But the Policy does not provide for collection of disaggregated data about the number of ST and SC families amongst those affected population in the survey to be conducted by the Administrator of R&R.

The Draft Policy provides for setting up a Tribal Development Plan for the development of the SC/ST families in their resettlement zone in cases where the displacement is 400 or more families en masse in plain areas, or 200 or more families en masse in tribal or hilly areas, DDP blocks or areas mentioned in Schedule V and Schedule VI of the Constitution of India. But no benefits have been provided to the displaced SC/ST families in projects involving linear acquisitions.

Although the Draft Policy provides that concerned Gram Sabha(s) should be consulted in all cases of acquisition in the 5th Schedule Areas including acquisition under the emergency clause of Land Acquisition Act, the Policy does not provide such safeguards in cases of land acquisition in the 6th Scheduled Areas.

The Draft Policy also does not provide guarantees for land for land compensation even to the STs and SCs. Clause 7.18.3 states that land would be allotted to STs and SCs only "if available".

h. Grievance Redressal Mechanism

The Resettlement and Rehabilitation Committee to monitor and review the progress of implementation of resettlement and rehabilitation schemes is constituted by the State Government under the chairpersonship of the Administrator of R&R. But the Committee is not independent of the State government, as the State government prescribes the rules and procedures of the Committee.

The Grievance Redressal Cell under the chairpersonship of the Commissioner for Resettlement and Rehabilitation is also not independent. It is constituted by the State Government and all its rules and procedures including composition, powers, functions and other matters relating to the functioning of the Cell are prescribed by the State Government.

The Grievance Redressal Cell is also financially dependent on the Requiring Body. Hence, the Cell may not be able to ensure proper implementation of the R&R plan. Also, there is no nomination of civil society organizations or of representative from the affected persons into the National Monitoring Committee which is constituted by the Ministry of Rural Development of the Central Government.

III. Conclusion

If the government of India is serious about rehabilitation of the displaced persons, it must first repeal the Land Acquisition Act of 1894 and then adopt a law which guarantees the rights of the displaced. A policy cannot override the law and in a country where there is disregard for the laws, a policy cannot be of any help.

Law soon for rehabilitation before SEZ land acquisition News

New Delhi, April 15 (IANS) Facing protests over land acquisition for setting up Special Economic Zones (SEZs), the government is considering to enact a law making it mandatory for industries to rehabilitate the displaced people before developing projects.

Piloted by the Rural Development Ministry, the Resettlement and Rehabilitation (R&R) Bill is currently being examined by the law ministry, said sources from the two ministries.

"We have a two-pronged strategy. Besides enacting a new R&R Act, the Land Acquisition Act too would be amended to give the new law an overriding effect over the Land Acquisition Act and the Special Economic Zone Act," said a rural development ministry source.

Earlier this week, Rural Development Minister Raghuvansh Prasad Singh had said his ministry's relief and rehabilitation policy would soon go to the cabinet.

Singh indicated that compulsory land acquisition for industrial projects including Special Economic Zones would not be allowed "at any cost" in the policy. He said his ministry "would ensure that the interests of farmers are protected".

Climate Change Will Devastate South Asia

The Hindu

9th April 2007

A final draft of a report leaked from the Intergovernmental Panel on Climate Change (IPCC) to the authors lays out shocking scenarios for India and the rest of South Asia. The summary for policy makers that was released by the IPCC on Friday is a call for urgent action globally. While shocking, the fuller final draft version of the Second Working Group of the IPCC's Fourth Assessment Report, which may be watered down before final publication, makes for even more sobering reading: It lays out in explicit detail what lies ahead for India and the rest of Asia. It also presents an opportunity for the country to take the lead in defining a more secure and sustainable future for itself.

Here are some of the devastating consequences detailed in the provisional February 16, 2007, IPCC report on Asia:

*Sea levels will rise by at least 40 cm by 2100, inundating vast areas on the coastline, including some of the most densely populated cities whose populations will be forced to migrate inland or build dykes — both requiring a financial and logistical challenge that will be unprecedented. In the South Asian region as a whole, millions of people will find their lands and homes inundated. Up to 88 per cent of all of Asia's coral reefs, termed the "rainforests of the ocean" because of the critical habitat they provide to sea creatures, may be lost as a result of warming ocean temperatures.

* The Ganga, Brahmaputra, and Indus will become seasonal rivers, dry between monsoon rains as Himalayan glaciers will continue their retreat, vanishing entirely by 2035, if not sooner. Water tables will continue to fall and the gross per capita water availability in India will decline by over one-third by 2050 as rivers dry up, water tables fall or grow more saline. Water scarcity will in turn affect the health of vast populations, with a rise in water-borne diseases such as cholera. Other diseases such as dengue fever and malaria are also expected to rise.

*Crop productivity will fall, especially in non-irrigated land, as temperatures rise for all of South Asia by as much as 1.2 degrees C on average by 2040, and even greater crop loss — of over 25 per cent — as temperatures rise to up to 5.4 degrees C by the end of the century. This means an even lower caloric intake for India's vast rural population, already pushed to the limit, with the possibility of starvation in many rural areas dependent on rainfall for their crops. Even those areas that rely on irrigation will find a growing crisis in adequate water availability.

* Mortality due to heat-related deaths will climb, with the poor, the elderly and daily wage earners and agricultural workers suffering a rise in heat-related deaths.

This grim future awaits India in the coming century. The irony is that much of this damage will be self-inflicted, unless the country is prepared to make a radical, enlightened change in its energy and transportation strategies.

We are truly at a crossroads: Either we can be complacent or wait for leadership from a reluctant United States, the largest greenhouse gas emitter in the world, or begin to take action now, regardless of what other countries do.

The path that India has taken thus far, of waiting until wealthy countries take action on global warming, is understandable if viewed in isolation. The U.S., the U.K., and other countries in the wealthy North, have developed their economies largely thanks to fossil fuels. It is only fair that India be allowed to attain the same standard of living before curbing its emissions.

But as the IPCC report makes clear, while it may be "fair" to do so, it is also suicidal for India to pursue any strategy but the least carbon-intensive path toward its own development. Wealthy, less populous countries in the North are very likely — and very unfairly — going to suffer fewer devastating blows to their economies, and may actually benefit with extended growing seasons, while India and other South Asian nations will dramatically and painfully suffer if action is not taken now.

Today, much of India's energy comes from coal, most of it mined in the rural areas of Orissa, Jharkhand, and Bihar with devastating consequences. Tribals and small and marginal peasants are being forced to resettle as these mines grow wider by the day. Inadequate resettlement plans mean more migration of landless populations to urban slums. The environment is being destroyed by these mines and their waste products — among them fly ash laced with heavy metals and other toxic materials. But the biggest irony of this boom in coal-fired power is that much of the power is going to export-oriented, energy-intensive industry. Look at Orissa's coal belt and you will find a plethora of foreign-owned and Indian aluminium smelters, steel mills, and sponge iron factories — all burning India's coal, at a heavy cost to local populations — then exporting a good share of the final product to the China, the U.S. or other foreign markets.

Volatile mix

Add to the problem of export-oriented, energy-intensive industry the problem of carbon trades, and you have a volatile mix. India is one of the top destinations globally in the growing carbon market. In exchange for carbon trade projects in India, wealthy polluters in the North are able to avoid restrictions on their own emissions. Rather than financing "clean development" projects as promised, many of these trades are cheap, dirty, and harmful to the rural poor. Fast-growing eucalyptus plantations are displacing farmers from their land and tribals from their forests.

Sponge-iron factories are garnering more money from carbon trades earned by capturing "waste heat" than from the production of the raw material itself.

Toxic fly ash from coal-fired power plants is being turned into bricks, and the carbon that would have been released from traditional clay-fired brick kilns, is now an invisible commodity that can be sold as carbon credits. These carbon trades are not helping finance clean energy and development for India's rural poor.

Add to this the special economic zones or SEZs — forcing people off their land, where blood, often of the most vulnerable, is shed at the altar of development.

Global warming will tighten this growing squeeze to a noose, as huge areas of Bangladesh go underwater and environmental refugees flood across India's borders. The leaked final draft of the IPCC report shows that Bangladesh is slated to lose the largest amount of land globally — approximately 1000 square km of cultivated land — due to sea level rise. Where will all of those hungry, thirsty, landless millions go? Most will flock to the border looking for avenues to enter, exacerbating an already tense situation not only in the States contiguous to Bangladesh but in cities as far off as Mumbai and Delhi.

Undoubtedly, global warming is not fair. It is exacting the highest price on those least responsible for the problem. But India can show the world that there is another way forward: A self-interested, self-preserving way, focussed on clean energy such as solar and wind; on energy efficiency; on providing for its own population's energy needs ahead of foreign corporations; on public transportation plans that strengthen India's vast network of rail and bus transportation routes, rather than weakening it with public subsidies to massive highways and to automakers. The IPCC final draft report urges India and other Asian countries to prepare for the coming climate apocalypse with crop varieties that can withstand higher temperatures, salinated aquifers, and an increase in pests. It also advises better water resource management and better disease monitoring and control. While important, prevention is always the best medicine.

The IPCC final draft report should be seen as a conservative assessment of what lies in store. It clearly implies that incremental or palliative responses to reduce vulnerability are not the answer. India and the other countries of the region need to take a preventative approach by moving their economies away from fossil fuels and toward clean, renewable forms of energy. This is the only way of preserving a sustainable way of life that could be a model for the world. If it pursues what is "fair" in a warming world by continuing to argue that industrialised nation are to blame and need to take urgent action, it will be placing the noose around its own neck while the hangman looks on.

Long queue for coal blocks

The Telegraph

21st April 2007

The coal ministry has received over 1,400 bids for captive mining of 38 blocks.

The coal blocks, having reserves of 6.12 billion tonnes, are in Chhattisgarh, Jharkhand, Bengal, Maharashtra and Madhya Pradesh.

The mines have been earmarked for power, steel and cement.

There are 748 applications from power companies, 142 from steel and 531 from cement.

The criteria for allocation will be the end user and the size of the project. The ministry has reserved 15 blocks for the power sector, while for the rest iron and steel will get preference over cement.

In power, projects of 500 mega watt (mw) and above will get preference and in steel, it will be projects of one million tonne (mt) and above.

Coal secretary H.C. Gupta said the allocation would be completed within three months. He said there were no plans for more rounds of bidding this fiscal.

A screening committee, under Gupta, will decide on the allotments. The government has so far allotted 130 blocks, having reserves of 27 billion tonnes, for captive mining.

The government has now allowed standalone mining companies, both Indian and foreign, to bid for the blocks. However, they must have supply contracts with power, steel and cement companies.

Supply norms

The committee on coal distribution will submit its report in two weeks, according to Gupta.

The committee was set up after the Supreme Court barred distribution of coal through e-auctions.

The committee is reviewing the distribution norms for different sectors, system of classification of consumers into 'core' and 'non-core' users and supply arrangements for the small-scale and tiny sectors.

Before the apex court stopped e-auctions in December, user industries were classified into core and non-core sectors. Industries in the core sector received assured supply of coal at regulated prices, while non-core industries bid through e-auctions. The prices for non-core industries were also higher.

Since December, the arrangement remained the same for core industries. However, non-core industries had to buy coal through e-bookings at prices 30 per cent higher than the regulated price.

The committee is likely to drop cement, steel, fertiliser and paper companies from the core category.

A senior Coal India official said only power companies can claim the core status and get supply at the regulated price. This is because these companies themselves operate in a regulated environment.

The official said cement and power companies should be stripped of their core status, since they change prices at will which breaks the principle of supplying coal at regulated prices.

The government is giving low priority to cement companies in the allocation of coal blocks for captive mining, and it is likely the sector will lose its 'core' status in coal distribution.

Warnings ignored in Dhanbad underground fire

Hindustan Times

19th April 2007

They are sitting over a 'volcano' and perhaps awaiting the disaster to strike in a big way.

Despite repeated warnings by the Directorate General of Mines Safety (DGMS), the Bharat Coking Coal Limited (BCCL) has still initiated no steps to vacate the Ena colliery officers Colony beneath which the underground inferno can play havoc any moment.

"The officers and the management of the BCCL should realize the magnitude of the impending danger and initiate immediate steps to ensure the safety of not only their officers but also of their thousands of the coal workers living in endangered areas," the Director General of the DGMS, Mr Man Mohan Sharma said.

"We have identified at least 69 most sensitive places in the command areas of the BCCL and ECL and even apprised the coal companies of the unstable mines in the areas. It is now up to the BCCL to rise to the occasion and ensure serious steps to meet the challenge of the underground inferno," he said.

It is worth mentioning that the DGMS has already sent the list of the most vulnerable pockets under the command areas of the BCCL and the ECL, to the union ministry of labour. The BCCL's Ena officer's colony also figures in the list prominently.

The DGMS, after the disaster at the Nayadih Kusunda basti in which at least six persons were buried alive had again warned against repeat of the tragedy in other areas including at the Ena officers colony. "Where should we go now? It is entirely up to the BCCL top brass to decide on the evacuation and subsequent shifting of the colony to safer areas," the officers residing at the Ena colliery project told the HT.

The BCCL Director (project and Planning), Mr SN Katiyar, however, said, "We are assessing the situation in accordance with the guidelines of the DGMS and evolving measures to counter the situation."

"But, the steps will be taken only after the disaster and on the bodies of the officers and the workers," pointed out a senior functionary of the Coal Mines Officers' Association of India (CMOAI). "Unless the much-awaited Jharia Action Plan gets underway the underground fire and the unstable mines will continue to send alarm signals across the affected pockets," the national president of the CMOAI, Sukhdev Narayan said.

As per the DGMS report at least three coal seams including numbers 10, 11, and 12 are unstable due to underground fire. The areas are most vulnerable to the land subsidence and are posing serious threat to the dwellings, District Board roads and other vital installations in the Ena colliery the report of the DGMS said.


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