MAC: Mines and Communities

Vedanta charges ahead in India

Published by MAC on 2012-05-08
Source: Press Trust of India, Down To Earth, TNI (2012-05-03)

London-listed Vedanta Resources has yet again fallen foul of Indian law.  Its Sesa Goa subsidiary is finally to be prosecuted for alleged fraud connected with iron ore trading.

See previous posting on MAC: Vedanta accused of fraud - yet again!

Meanwhile, residents in Goa itself accuse Vedanta of seeking to build a new pig iron smelter under the guise of expanding an existing, highly polluting, plant.

Yet another group of government workers has taken umbrage at the prospect of a deal with Vedanta - this time in Orissa.

Last month, staff at child nutrition centres in Karnataka revolted against a move to place the UK company in charge of a government feeding programme. See: Vedanta casts more oil on troubled Indian waters

Now, employees at state-run Nalco are protesting against the prospective sale of their alumina to Vedanta's Jharsaguda smelter.

The workers maintain that Nalco "will not only lose precious foreign exchange leading to fall in its profit, it would also pave the way for Nalco's privatisation. We will not allow this to happen".

Unruffled flakes

By Sugandh Juneja

Down To Earth (India)

5 May 2012

Pig iron plant of Sesa Goa pollutes South Goa; firm says expansion will take care of problems

There are graphite flakes in the air, says V D Naik, resident of Khandola-Betki village in South Goa as he points to the silvery powder on a plant near his house.

Pig iron plant of Sesa Goa pollutes South Goa
Pig iron plant of Sesa Goa pollutes South Goa
Photo: Sugandh Juneja, Down to Earth

It is from a pig iron plant, two kilometres away, says Mahesh Gaonkar of people's organisation Mandavi Paryavaran Premi Pathak (MPPP). The plant owned by private company Sesa Goa Ltd is situated in Amona village, which is separated from Khandola-Betki by the Mandavi river.

Gaonkar claims that deposition of graphite over a long period has affected agricultural produce. "The size of coconuts has reduced drastically, and cashew produce has declined by half," he says. Sesa Goa acknowledges that graphite is a problem, attributing it to a design constraint of the blast furnace (see 'The design constraint') .

"Despite having appropriate air pollution control equipment like a movable hood suction system and a bag filter, the problem of graphite remains," says N L Vhatte, vice-president of the pig iron division of Sesa Goa.

Gaonkar claims that people have been protesting for a long time but nothing has been done, and with the upcoming expansion plan of the plant, the residents will feel more threatened.

The expansion plan Gaonkar is referring to is actually technological upgradation of the furnace. "The idea is to remove snags and streamline the production process," clarifies Vhatte. This will reduce graphite flakes by 99 per cent and the rest can be handled by the air pollution equipment. "To execute this, the capacity of the plant will have to be enhanced, which the people have misunderstood," adds Vhatt

The design constraint

Sesa Goa commenced its first mini blast furnace in India in 1992 with Tata-Korf design of 173 cubic metre size. The existing furnace design has some limitations such as:

  • Low hearth volume
  • Less distance from tap hole to tuyere centre
  • Low bog depth
  • Less headroom for de-dusting hood

Due to these limitations, the furnace wind is always centering towards the tap hole, resulting in very high metal temperature. High metal temperature leads to increase in carbon element in the hot metal, which promotes graphite formation. For improvement, the company has planned a de-bottlenecking project, which will overcome these limitations and create additional headroom for implementing full-fledged and efficient de-dusting system which was not there in the original design.

"The best available technology is that of MECON and they have recommended increasing the working volume from 173 to 250 cubic metre to eliminate the above mentioned limitations, which will also result in increased production," adds Vhatte.

The public hearing for the expansion has been cancelled thrice. The Goa State Pollution Control Board had given the reasons for cancellation while replying to Right to Information queries of MPPP.

The first public hearing, supposed to be held in February 8, 2011, was cancelled on the request of Sesa Goa. The company had informed that the officers concerned were not available.

The hearing was rescheduled for February 28; this the additional collector of North Goa district adjourned due to "law and order problem during the process of public hearing".

The next scheduled hearing on June 14 was cancelled "on grounds of administrative reasons".

The residents allege the so-called expansion is actually construction of a new plant. "The old plant is in Amona while the new one, which the company has termed as expansion, is in the Naveli panchayat," says Naik. Vhatte clarifies that it is essentially the same piece of land, but separated by road. The land on which the plant is built and the one where expansion is being planned has been leased from the comunidade of Amona in 1996 against a payment of Rs 76,860 per year.

A comunidade is an old collective land-ownership pattern prevalent in Goa. Vhatte explains that the company signed a final possession for the 19-hectare with the comunidade.

But the residents give a different version. "Sesa Goa's agreement with the comunidade expired in February last year. So now a fresh agreement needs to be signed," they say. The lease document says the land is granted to the company on "aforamento" basis, which implies the company cannot claim ownership of the land nor sell it. The company officials, however, say the land belongs to them. "We are planning to raise the annual payment to Rs 14 lakh per annum," says Vhatte. Most of the members of the comunidade are employees at the plant, he adds.

The other concern of the residents is the deteriorating quality of the Mandavi due to the loading and unloading along its banks.

"There are four docks, which result in accumulation of dust in the river," says Gaonkar. Sesa Goa says it had a plan to overcome the problem, but that the plan has hit a roadblock. It has put covered conveyors till the loading point from where a pneumatic pipe (used to transport solids using compressed air) would have transferred the material on to the barrages. "This will mean a closed transportation system which will minimise dust pollution because the movement in the pipe is level by level as opposed to free fall loading at present," adds Vhatte.

But the equipment lies unused as it has been challenged in the High Court of Bombay at Goa.

Naik says the residents never approached the company to discuss the problem because they feel it would have been of no help. But Vhatte assures: "We are open to interaction."


Prosecution filed against Sesa Goa for violation of Cos Act

Press Trust of India

3 May 2012

New Delhi - The government on Thursday informed Parliament that it has initiated prosecution proceedings against Vedanta Resources-owned Sesa Goa for violation of certain provisions of the Companies Act.

"Based on the recommendation made by SFIO in its investigation report, prosecutions under Sections 147 and 395 of the Companies Act, have been filed in Court, while prosecution for the violation under Section 211 is being filed," Minister of State for Corporate Affairs Mr R P N Singh told the Lok Sabha in a written reply.

The Minister further said that the Institute of Chartered Accountants of India (ICAI) has been asked to look into the role of auditors of the company.

"...a reference is being made to the ICAI to initiate disciplinary action against the statutory auditors of the company for professional misconduct under schedule I and II of the Chartered Accountants Act, 1949", Mr Singh said.

The government on October 23, 2009, had asked the Serious Fraud Investigation Office (SFIO), a probe wing under the Corporate Affairs Ministry, to look into iron trading by Sesa Goa.

The minister also said that the government has approved the proposal of Cairn Energy Plc to transfer 40 per cent of equity shares of Cairn India to Vedanta Resources Plc on certain conditions.

These conditions include performance guarantee by Cairn Energy Plc, clearance from the Home Ministry and relevant regulatory approvals from Securities and Exchange Board of India (Sebi), he added.


Nalco staff oppose alumina sale to Vedanta

Times News of India

30 April 2012

ANGUL: Employees of Nalco here have threatened to launch protests against the reported move of the company to sell alumina to Vedanta Aluminium Limited (VAL).

On Friday, a few employees under Nalco Sramik Congress Union organized a demonstration in front of the company's captive power plant. A day before, the Aluminium Mazdoor Sangha (AMS), had held demonstration in front of the smelter plant, while another demonstration has been planned on May 3 in front of Nalco's corporate office in Bhubaneswar.

Nalco produces 16.5 lakh metric tonne alumina at its Damanjodi plant. Of the total output, its Angul smelter plant gets about 8.18 lakh metric tonne annually, while the rest is exported through London Metal Exchange (LME).

The Nalco authorities came under suspicion after its August 26, 2011 tender in which the company sought international bidders to sell nearly 300,000 tonnes of alumina.

As the product was meant for exports, the tender barred any domestic entity to participate. This was followed by the VAL chief executive director, Pramod Suri, writing a letter to the secretary, ministry of mines, seeking permission to participate in the bidding. The VAL's smelter plant at Jharsuguda is facing problems in sourcing enough alumina to run it.

Nalco employees, however, smell a rat in the whole move. Paresh Jena, general secretary of Nalco Sramik Congress Union (NSCU) alleged, "If the Nalco management sells alumina to Vedanta or to any domestic firm, the company will not only lose precious foreign exchange leading to fall in its profit, it would also pave the way for Nalco's privatization. We will not allow this to happen".

"VAL is a competitor for us. The deal would be unfair and not in the interest of Nalco. Angul's Nalco smelter plant consumes 2,200 metric tonne of alumina daily for its 840 pots and it would require 2600 metric tonne daily to run its 940 pots everyday," the NSCU vice-president Gobinda Chandra Mishra said.

Contacted, the chairman-cum-managing director (CMD), Nalco was unavailable for comment. Most of the Nalco officers were tight-lipped. A senior official, however, maintained no final decision has been taken for selling alumina to VAL.

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