MAC: Mines and Communities

Bauxite mining will spell disaster in Andhra Pradesh

Published by MAC on 2005-07-08

First Mega fast track project for Vizag

The Hindu, Santosh Patnaik

8 July 2005

Andhra Pradesh - Visakhapatnam - Whatever may be the ramifications, Visakhapatnam has been chosen for locating the first mega fast track aluminium project, cleared by the Congress Government headed by Y.S. Rajasekhara Reddy.

The investor community was caught unawares with the sudden signing of a memorandum of understanding (MoU) with the Jindal South West Holding Limited (JSWHL) for establishing a smelter and a refinery in the district with a mega investment of Rs.9,000 crores.

No project report

Ironically, the agreement was signed without preparing a detailed project report and zeroing in on probable sites for the smelter and the refinery.

According to an official of the Industries Department, the MoU is a major achievement in the wake of speculation that the much-hyped car unit by the German auto major, Volkswagen AG, is off.

Interestingly, Jindal Group has evinced a keen interest for a massive investment for the proposed smelter with an annual capacity for 2.5 lakh tonnes of alumina and the refinery with a capacity to produce 1.5 million tonnes of the metal.

Sources in the Jindal Group say that the take-off time will be three years and Andhra Pradesh Mineral Development Corporation will extract bauxite ores for the former from the mines identified in the hill ranges from Papikonda in East Godavari to Sileru and Krishnadevipeta in Visakhapatnam district.

Bauxite reserves

A preliminary survey conducted a decade ago had revealed that the hill ranges in the two districts have an estimated 700 million tonnes of bauxite.

The State Government considers the MoU as a major achievement as it came close on the heels of talks with the Centre-owned aluminium major, National Aluminium Company (Nalco), for a joint venture. Sources said that following doubts expressed by Nalco on the viability of the project due to opposition from local Girijan groups and NGOs, the Jindal Group agreed to foray into aluminium sector.

Jindals will not only get octroi, entry tax and other levy exemptions, but will also avail themselves of the opportunity to extend their synergies to a highly lucrative sector. The $4 billion group has proven its excellence in steel, power, minerals, mining, industrial gas and port facilities.

Prior to this development, the Dubal Alumina Company of Dubai had shown interest for massive investment by forming a consortium after an aerial and field survey in Chintapalli area during the Telugu Desam Party regime.

A non- starter

However, the project turned a non-starter following a hue and cry over the alleged violation of the Regulation 1 of 70 of the Andhra Tribal Land Transfer (Prevention) Act and the fears over the threat posed to the Girijan lifestyle and the eco-system of the Eastern Ghats.

Only time will say whether the Jindal project will take off within the three-year period as promised by the promoters or face rough weather.

Bauxite mining will spell disaster: MLA

THE HIN, Staff Reporter

3rd July 2005

VISAKHAPATNAM: The Paderu MLA, Lake Raja Rao, on Sunday said bauxite mining in the agency area and establishment of an alumina factory by Jindal in the district, with an investment of Rs. 9,000 crores, would cause environmental disaster and displacement of tribals.

Reacting to the decision to give mining lease to the Andhra Pradesh Mineral Development Corporation (APMDC), he said they would oppose lock, stock and barrel if mining was undertaken without addressing to the livelihood problems of the tribals.

"Any mining will lead to destruction of forests. As everyone knows, tribals eke out a living, even without education by collecting addakku, karakaya and other minor forest produce," he pointed out.

Let the Government spell out what jobs it would provide to the local people, he said adding that such a mega project by the Jindal Group would cause massive displacement of indigenous people in the agency belt of Visakhapatnam district.

The bauxite mining project would change the shape of the agency area due to disturbance in the hill streams, which supply water to the plain areas.

He said the Tribal Advisory Committee had adopted a resolution recently that lands owned by Chenchus in Srisailam forest area should not be transferred to anyone. The authorities should also ensure that patta lands are not transferred from one tribal to other in the entire State to protect their interest, he added.

Jindal plans Rs 9,000-cr aluminium plant at Vizag

The Hindu Business Line, Our Bureau, Hyderabad

1 July 2005

JINDAL South West Steel Ltd (JSW), part of the Rs 18,000-crore OP Jindal group, will set up a major aluminium project involving a refinery and smelter plant near Visakhapatnam at a total capital outlay of Rs 9,000 crore.

JSW entered into a MoU with the State Government to this effect on Friday.

The MoU was signed by the Industries & Commerce Secretary, Mr B. Kripanandam, and the JSW Joint Managing Director and CEO, Mr Raman Madhok, in the presence of the Chief Minister, Dr Y.S. Rajasekhara Reddy, and the JSW Vice-Chairman and Managing Director, Mr Sajjan Jindal.

The production capacity would be 1.5 million tonnes a year for the refinery and 0.25 million tonnes a year for the smelter.

The raw material - bauxite ore - would be sourced from AP Mineral Development Corporation (APMDC), which would mine the bauxite independently.

The time-span between the project plan to production take-off is expected to be about three years.

According to a release, the AP Government and the OP Jindal group have agreed to incorporate and promote an alumina and aluminium refinery and smelter to produce about 2.5 lakh tonnes of aluminium a year initially, with provision for suitable expansion in the State at the locations mutually agreed to by the two parties.

JSW Steel is the country's third largest integrated steel plant with a capacity of 2.5 million tonnes a year, which is currently being enhanced to four million tonnes a year by March 2006.

The expanded capacity includes one million tonnes of value-added products comprising galvanised steel and colour coated products.

The company has three plants - two in Maharashtra and one in Karnataka.

In a release, the company said that it currently commands 15 per cent share in the Indian market.

The Chief Minister said that the Government would consider providing exemptions to the project from octroi/entry tax, etc., and tax incentives and exemptions as being extended to mega fast track projects.

According to the MoU, APMDC should not sell or export bauxite from these deposits allocated to it in the Araku area near Visakhapatnam to any other party without meeting the requirements of JSW Steel.

The aluminium company has to offer equity to APMDC at the percentage as may be decided by the Committee appointed by the State Government.

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