MAC: Mines and Communities

India Update

Published by MAC on 2006-08-23

India Update

23rd August 2006

It's now confirmed that the respected Wildlife Institute of India (WII) - commissioned to deliver a report to the Supreme Court's Central Empowered Committee (CEC) - has con- demned the joint proposal, by Vedanta Resources and the Orissa Mining Corporation, to mine bauxite from the Nyamgiri Hills in order to feed its Lanjigarh alumina refinery.

The WII's conclusions will be welcomed, not only by environmentalists but supporters of rights for India's "first peoples". It won't be appreciated by Vedanta which expressed con- fidence earlier this year that its refinery would have come on stream before now. The com- pany's executive chair, Anil Agarwal, has also had to suffer the the Indian government 's recent rejection of his bid to take over the state's holding in his primary bauxite-aluminium producer, Balco.

This closely follows the publication of a book by Rohit Poddar, entitled "Vedanta's Billions" which delivers an excoriating attack on Mr Agarwal 's alleged corruption, and calls on India's finance minister, P D Chidamaram (a former director of Vedanta) , to sever his relationship with the London-based super-capitalist.

Although a couple of swallows don't make a summer, a new government report has raised questions about India's breakneck pace of industrialisation, and its impact on land resources. The leader of the Community Party of India (Marxist) has called for a new national minerals' policy, to preserve jobs and build up the country's infrastructure, rather than mortgage res- ources to overseas buyers.

The famous Samata judgment of 1997 (asserting the rights of tribal communities to prevent private exploitation of their territory) was evoked a week ago when the eponymous support NGO (and MAC editorial member) rushed to the support of villagers - many of them women - trying to stop quarrying for construction materials in Andhra Pradesh.

Over the past month, several Indian companies have announced new ventures overseas. Jindal Strips is foraging into South Korea, Turkey, Italy and eastern Europe. It's also grabbed a huge stake in Mozambique coal.

Meanwhile, claims that India is playing a leading role in promoting "clean coal" technology may be taken with a least a pinch of salt...

Mining will destroy Niyamgiri: WII

21st August 2006

BHUBANESWAR: The State Government's proposal for mining of bauxite from the Nyam- giri hills for the Vedanta Alumina Limited's (VAL) project at Lanjigarh in Kalahandi district received a jolt with the Wildlife Institute of India (WII) observing that it would dry up ground water in the region and consequently affect the quality of habitats.

In its report submitted to the Supreme Court recently, the WII has mentioned that the Niyam- giri hills are source of the Vansadhara and Nagabali rivers. Besides, 36 streams originate from the hills. Majority of the streams have originated from the lowermost contour of the bauxite layer.

The bauxite layer which is formed through leaching also acts as a layer for imbibing water and releasing it slowly throughout the year, it said, added that mining activities in this region would adversely impact this process.

Contradicting the environment impact assessment (EIA) report of Lanjigarh bauxite mine, in which these areas are defined as unproductive and tree deficient areas not useful for wildlife and forests, the WII observed that these plateaus are very productive with high occurrence of herbivore and carnivore species.

These areas are breeding and fawning ground of four- horned antelope, barking deer and several other species, it added.

Mining would also affect the economies of two major tribes, Sauras and Kondhs, who inhabit the area. Their economies are forest based, agriculture, labor and domestic animal husbandry. Around 50 percent of their annual income is derived from 'siali' leaves, 'harida', 'char' and 'sal' seeds, hill broom and honey.

The report observed that various kinds of environmental degradations are associated with open cast mining proposed for the project. These are landscape changes, loss of forest, land degradation, loss of flora, fauna and habitat, land vibration, air and water quality reduction.

Mining would also bring changes in geomorphology of the area and enhance several other consequences leading to soil erosion and impact on drainage and forest productivity.

Mine site preparation and access of road to hilltop involve removal of prime vegetation cover. This will destroy several wildlife associates of this habitat and reduce diversity of tropical moist deciduous forest.

Besides, the area proposed for clearing of trees for alignment of road also harbours giant squirrel, a highly endangered canopy dwelling species, that inhabit specialised habitats characterised by closed canopy forests, it said and added that cutting of trees in the area would lead to the destruction of canopy cover critical for presence of such species.

Exodus of people involved in mining activities would also exert pressure on residual natural resources, it said and added that reduction in the number of some endangered species of plants and animals will be eminent and unavoidable.

Brakes on industrialisation

Editor, Dainak Statesman

23rd August 2006

Just when acquisition of fertile agricultural land for setting up two big industrial plants ~ one in Singur in West Bengal and the other near Meerut in Uttar Pradesh ~ for two reputed Indian companies has kicked up a row because of stiff resistance being put up by landowners, the report of the working group on land relations set up by the Union government has "strongly recommended" that "as far as possible, fertile agricultural land should not be acquired for or by any company". "The industrial units should be located in areas where wasteland is available."

The report has deprecated the tendency of some state governments to promise both private and public enterprises land at low prices because of which farmers tend to be the net losers in the compensation they receive.

The report says that, since the land market is generally weighted against the small and marg- inal farmers, a group approach needs to be adopted so as to "enhance their barking power so that they get proper compensation and other dues."

"Farmers should be entitled to their share in rising land prices in the wake of urbanisation and any form of major investment."

The report opposes "indiscriminate, large-scale, ecologically damaging and socially harmful transfers of agricultural land for non-agricultural use to speculative land markets in the immediate periphery of urban areas."

To prevent long-term, speculative transactions on agricultural land, suitable enactment of legislation has been recommended. Large-scale transfer of land from agricultural to non-agricultural use ought to be subject to an environmental protection clause and its strict implementation.

For ensuring transparency in any land deal, the working group has laid down land acquisition processes. The company buying land must provide figures to those losing land on how the project will help them with a full package of rehabilitation and resettlement.

In case the company purchased land directly from the market, the government must fix a floor price below which farmers would not sell the land to anycompany.

If the company is unable to use all the land it has acquired, the unutilised part ought to be returned to the government for distribution to the landless.

Besides, the Land Acquisition Act needs to be amended to incorporate compensation not only for the land owners but also for those who are landless but dependent on land for livelihoods, for homes and items obtained from local, common and property resources.

In other words, landless labourers, artisans and tenants must be compensated with housing and livelihood security.

The working group was formed in March at the instance of the Prime Minister after a sudden spurt in rural violence and the growing influence of Maoist outfits, which control over 160 districts in 12 states where the normal writs of the Indian state do not run.

Dr Manmohan Singh was forced to set up the working group under Mr D Bandopadhyay, former land reforms commissioner of West Bengal as, a ccording to the Planning Comm- ission's estimate, t wenty-five per cent of the country's mainland territory was "being practically governed by extra legal and in some places illegal authorities".

The Prime Minister felt that this did not speak well of the country's governance.

According to the Planning Commission, due to dismal and tardy implementation of land ceiling laws, only 7.35 million acres of ceiling surplus land could be vested in the state up to March 2002.

Of this 5.39 million acres were distributed among 5.65 million beneficiaries. In West Bengal, over 1.3 million acres vested in the state could be distributed among 2.5 million beneficiary households.

Land holdings in the country, in the commission's view, remained skewed. There was con- siderable scope of further vesting surplus land even on the basis of existing ceiling laws, not to speak of a situation with further reduction in family ceilings.

To tackle the problem of rural unrest or what is commonly known as Naxalism or Maoism mostly in tribal-dominated areas, the group has recommended that tribals who are displaced by development projects must be resettled in a zone, adjacent to the affected area in con -sonance with their social, ecological, linguistic and economic affinity. Resettlement and rehabilitation ought to be completed prior to the project's commencement.

The package should be approved by the gram sabha in the Panchayat Extension to the Scheduled Area Act (PESA) area and by such other representative bodies in non-PESA tribal areas.

According to the PESA Act, the consent of the gram sabha is mandatory for minor and major minerals. In Orissa and Rajasthan, mining concession rules have to be modified to reflect the provision requiring consent of the gram sabha.

Also, the exact extent of land required for projects have to be reassessed by a neutral agency consisting of experts with representatives of the tribal population. The lack of transparency in the process of acquiring tribal land also needs to be addressed.

Government land encroached upon by poor tribal families have to be settled in their favour. Also, common property resources, including grazing land, village forest and water resources must [not] be acquired without providing alternative sources of equal or higher value. Efforts have to be made to ensure that all tribal families are resettled to the extent possible.

Compensation must be calculated and given on the basis of calculation of a 20-year, pros- pective income stream to tribal families for loss of customary forest rights. The group's most significant recommendation is that the state must promote the concept of a land bank wherein tribal land is purchased by the state and allotted to other deserving tribal families in the same area.

Lease of government land in tribal areas by tribals for agriculture and homestead purposes ought to be more than proportionate to the percentage share of the tribal population of the village.

To enable small farmers to participate and benefit from the land market, the group has rec- ommended a group approach to farm investment and cultivation wherever possible. Groups of poor farmers, especially women and Dalits, who are willing to work in groups, must be provided liberal assistance for acquiring land for joint activities, either in terms of collectively purchasing or collectively leasing of land in groups.

The group has opposed direct incursion into agriculture by corporate bodies or what is known as contract farming. This must be done to protect the livelihood of peasant farmers and others whose occupation are directly related to farming.

Otherwise, the report warns, it will increase the number of the rural proletariat, leading to rural unrest. Government wastelands must not be settled or let out to corporate bodies. It ought to be reserved for distribution among the landless poor and for public purposes.

The report says: "A view, however, was expressed that contract farming militates against the concept of autonomous peasant farming and therefore it should be discouraged if not banned."

Yechury seeks national policy on mineral resources

Special Correspondent, The Hindu

23rd August 2006

Suggests ban on export of iron-ore; opposes export dependence for economic growth

* Boost public investment to create infrastructure

* Left opposes hire and fire provisions

NEW DELHI: Expressing concern over the decline in employment in the organised sector, CPI(M) leader, Sitaram Yechury, has called for a national policy to harness conventional mineral resources to develop infrastructure and, thereby, improve job opportunities. In this context, he suggested banning export of non-renewable mineral resources which could be used within the country.

Releasing a report of the Associated Chambers of Commerce and Industry of India (Assocham) on "the relationship between GDP and employment'' here on Tuesday, he said the study echoed the sentiments of the Left, which had held that India had been having jobless growth for the last couple of years.

Though India had registered an average 5.3 per cent growth between 1998 and 2003, he cited the report as saying that there had been a 4.14 per cent decline in employment in the organised sector over this period.

He concurred with the study's findings, which revealed that over this period, the employment rate fell by 4.32 per cent in the public sector and 3.74 per cent in the private sector. Describing the situation as worrying, he said a package had to be worked out to tackle the problem in a holistic manner.

Labour reforms

On mineral resources, he suggested that just as the Railways were governed by the Centre with various zones under its control, similarly there should be a national policy for conventional mineral resources with specific focus on their region-wise reserves.

The policy should decide as to how conventional mineral resources could be harnessed in the interests of the domestic industry, he said while opposing exports of iron ore.

Mr. Yechurty felt that relying only on exports would not help achieve the target growth rate. Instead, he said public investments had to be increased tremendously to create infrastructure, which would in turn create employment and generate domestic demand leading to growth.

On allowing foreign direct investment (FDI), he said the Left Parties would welcome any FDI that led to all the three - production augmentation, technological upgradation and employment generation. Regarding labour reforms, he said they would continue to oppose hire and fire provisions.

The Assocham report said the decrease in jobs in the private sector was evident in sectors like agriculture, mining, manufacturing and construction. The decline was visible in the con -struction sector where employment declined by 40.54 per cent between 1999 and 2003.

The public sector witnessed a declining trend in employment across sectors except in retail trade and finance. Employment generation was maximum in wholesale and retail trade at around 10 per cent.

In the public sector, the report said, the declining trend was maximum from 2001 to 2003.

"Since the public sector contributes more than two thirds of the workforce in the organised sector, its impact on overall growth is drastic,'' the report says.

Tribals' detention flayed

Special Correspondent

India Press

23rd August 2006

HYDERABAD: Samata, the NGO that works among the tribals, has condemned the police action in threatening and detaining 11 tribals when they were protesting against launch of mining operations on their lands in Thuburthi and surrounding villages in Anantagiri mandal in Visakhapatnam district on Monday.

In a statement, Ravi Rebbapragada of Samata, said the action was atrocious as the police were supposed to protect the tribals, rather than do the bidding for others out to exploit the tribal areas for commercial gain. It was unfortunate that the tribals who belonged to an area famous for the landmark Samata judgment of the Supreme Court, should be subjected to such ill- treatment.

The tribals belonging to Karakavalsa and Rallagaruvu villages were called to the Anantagiri police station after they resisted the attempts to start operations for mining calcite, mica, `china clay' and white clay, he said.

The tribals stopped them from using poclaines and other machinery. Police warned the tribals against repeating the action while detaining 11 of them.

Jindal Stainless scouting for buys in Asia, Europe

Greenfield Orissa unit to go on stream by 2008

Virendra Pandit. The Hindu Businesline Ahmedabad

21st August 2006

Jindal Stainless Ltd (JSL) is scouting for cold-rolling mills in Asia and Europe and is likely to clinch deals in 3-6 months, a company official said today.

Enthused at having turned around the cold-rolling stainless steel (SS) mill in Indonesia within 18 months of acquiring it for $50 million from the Maspion Group, the Haryana-based company is now foraying into new territories.

JSL is busy opening offices in Turkey and South Korea and warehouses in Italy and eastern Europe for this purpose, Mr R.K. Goyal, Director (Commercial), told Business Line.

He added that the Group would soon start talking to a few companies, but refused to identify them.

JSL has already commissioned its 2,50,000-tonne ferro-alloy unit at Dubri in Orissa and is now setting up a 16 lakh-tonne greenfield SS unit there at an investment of Rs 12,000 crore; it is scheduled to go on stream by 2008.

Together with the Hissar facility's expanded capacity of 7.20 lakh tonnes, the company would emerge as the largest integrated SS producer in the world, with a capacity of 23.20 lakh tonnes, he added.

Citing the Indonesian case, he said that the Jindals have increased its production from 50,000 tonnes at the time of acquisition to 60,000 tonnes now.

The turnover of JSL, part of the Rs 20,000-crore Jindal Group, is expected to increase from Rs 3,000 crore to Rs 4,500 crore this fiscal, he added.

In Gujarat, Mr Goyal said, JSL's business is to the tune of Rs 500 crore. It is setting up a service centre in Vadodara district at an investment of about Rs 40 crore to provide cust- omised products.

The company hopes to grow its business in the State by 20-30 per cent this year in view of setting up of refineries and other industries such as chemicals, plants and fabrication units.

Besides, the company is setting up similar service centres in Mumbai and Chennai and awaiting nod for its proposed SEZ in Orissa.

JSL is also foraying into products for the sugar sector by making its SS products sugar-friendly.

Mr Goyal said that the sugar industry usually consumes mild steel, which, due to its corrosion proneness, is not good for human health.

Even the USFDA has specified that a minimum of 16 per cent chromium is necessary in SS products to prevent corrosion.

India's clean-coal tech gets stronger

Times of India

14th August 2006

NEW DELHI: India's global alliance with five other member countries as part of a Coal Mining Task Force (CMTF) under Asia Pacific Partnership for Clean Development and Climate has got off to a strong start.

Sources said, 16 projects have already been finalised at the second meeting of the CMTF in India between August 8-10 of which as many as seven are India-focussed.

India is taking a strong position in global clean coal technologies in recognition of its growing importance as tomorrow's primary source of fuel.

This sense of urgency is being displayed despite growth rates of 6.4% last fiscal and 11% growth in coal production in the last three months alone, demonstrating a strong potential to overtake GDP growth projections of over 7% in the current fiscal.

While coal does promise energy security, removal of accompanying environmental damages is crucial to its effective utilisation, making the pace of progress of alliance significant.

These seven projects range from information sharing on coal processing technologies and coal drying to joint venture projects for fine coal benefication and waste coal management.

Besides, India has also sought technology transfer in 'overburden slope stability' and 'extraction of steep seam coal. 'All these areas will eventually culminate in high value commercial contracts as they progress.

JSW acquires coal mines in Mozambique

Baiju Kalesh, Times News Network

16th August 2006

MUMBAI: Sajjan Jindal-controlled JSW group is the latest to acquire foreign coal mines after the fruitful forays of peers such as Ispat Industries and Tata Steel.

Last week, the JSW group finalised the acquisition of a 200 million tonne coal mine in Mozambique, a small African country. Jindals will pay $6 million as token which will be followed by royalty payments as they mine coal.

Last month Mittals of Ispat Industries bought a 45 million tonne Colombian coal mine for $150 million to fire furnaces at Dolvi plant that can produce three million tonne of steel a year and other units abroad that have a capacity of 12 million tonne.

"The mine can feed the Dolvi unit for close to 15 years," a senior JSW official said. The cost of coal after royalties is likely to be about $48-50 per tonne compared to the current price of about $114 per tonne in the international market.

Low input cost will, in turn, help the company lower its cost of production, a strategy pursued by the Tatas to emerge as one of the cheapest producers of steel in the world.

Tata Steel, the country's second-largest steel maker and the only company to have adequate coal mines, however, had chosen a different strategy to secure long-term coal supplies.

It acquired a 5% stake in Carboraugh Downs, an Australian coal mining firm. With both captive iron ore and coal mines the company managed to reduce costs significantly. Sources say that it makes a tonne of steel for as little as Rs 10,000 compared to others who spend about Rs 12,000-15,000 per tonne.

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