MAC: Mines and Communities

Vedanta Update

Published by MAC on 2007-02-13

Vedanta update

13th Feburary 2007

Vedanta's BALCO subsidiary is to benefit from construction of a 42km road to its Bodai-Daldali mines in eastern Chhattisgarh state. This will enable the company to increase extraction of bauxite, much of which is currently being shifted to its illegal refinery in neighbouring Orissa.

The remainder is going to its huge aluminium complex in Korba where a major increase in coal-fired electricity is underway, or being planned.

Following last month's publication of a damning expose of Vedanta's exploitation of its workforce in Korba, India's Centre of Indian Trade Unions (CITU) has demanded an official investigation into funding of political parties in India by Vedanta's executive chairman, Anil Agarwal.

The issue was first raised at last August's company shareholders meeting in London. Now,CITU claims, the payments are illegal, since foreign companies are forbidden from financially supporting Indian politicians.

Balco to construct road in Chhattisgarh

Raipur, (IANS)

13th February 2007

Aluminium major, Bharat Aluminium Company Ltd. (Balco), has agreed to the Chhattisgarh government proposal for construction of a 42 km road in Kawardha district where the firm has a lease to mine bauxite.

The company would also maintain the road in the impoverished hilly Kawardha region, largely populated by the Baiga tribe, said an industry department official.

He added that roads in the region were in a bad shape with the company's heavy vehicle plying raw material.

Balco, which has a large integrated aluminium construction complex in Korba, 210 km from here, has got a 20-year lease for mining bauxite in 626.17hectares of land in Kawardha's Mundadadar, Keshamrada, Radda and Semsatha villages.

Balco was incorporated in 1965 as a state-run firm. In 2001, the Indian government sold 51 percent of Balco's equity to Sterlite Industries for Rs.5.51 billion.

Korba coal attracts 10,000 mw addition

Financial Express, Korba

13th February 2007

Chhattisgarh is waking up to the potential of coal-based power, with a host of new projects and expansion projects centered around Korba industrial town, which sits on a coal belt.

The Chhattisgarh State Electricity Board has not seen any addition to its capacity of 1300mw during the last 15 years. Nor had the NTPC plant of 2100mw. Balco, in which the government retains a stake after its privatisation, had enough power to meet its own needs but can help the state's grid.

With one of the lowest per capita consumption, Chhattisgarh is now adding 10,000mw in stages and will soon be surplus in power.

Work on the Korba east power plant is progress fast, after languishing under the earlier government, headed by Ajit Jogi, which took three years to clear the site.

The present government has removed all obstacles in the way of an early commissioning.

Last month, the power plant was "lighted up", a precursor to proper commissioning, which will happen within a couple of months. However, there are worries over the work related to the cooling tower and water supply.

The state has invited entrepreneurs and asked the SEB to add one more unit of 500mw in the Korba west plant, which has shortlisted the contenders. It is learnt that a Chinese plant has bid the lowest.

When Chhattisgarh was carved out of Madhya Pradesh, the state was power-surplus, with a capacity of 1900mw including its share of 500mw from the Central government's NTPC project.

But demand soon spurted and the state had to impose power cuts in villages to feed industry.

The government then decided to revamp and refurnish four old units of the SEB plant at korba, which helped to reclaim 40mw.

For the CSEB, Korba, with 10 units of varying capacities, was the first choice. The old site of the abandoned Korba east project was revived as the location of a new 500mw capacity with Bhel has the major partner for construction.

Although the NTPC plants at Korba generate 2100mw, they are connected to the power hungry western grid and spare hardly 25% for the state.

Balco, now under the Vedanta group, has its own plant of 270mw. Recently, it decided to add 540mw with a Chinese company has the construction partner. In the long term, Balco will add 1200mw.

Lanco of Hyderabad has already acquired land and started construction of a 600mw plant at Korba.

CITU demands review of Balco deal

The Hindu

2nd February 2007

* Alleges violation of shareholders' agreement

* Alleges contributions are made by a foreign group to political parties

* Company's annual report admitted to paying money to various political parties

NEW DELHI : The Communist Party of India (CPI-M)-backed Centre of Indian Trade Unions (CITU) has sought a review of the deal concerning the Korba-based Bharat Aluminium Company Ltd. (Balco) in the wake of charges of pay-offs to political parties and complaints of violation of the shareholders' agreement by Sterlite on labour related issues.

In a letter to Prime Minister Manmohan Singh, the CITU demanded corrective measures, including cancellation of the agreement, following reports that in 2005, the company contributed $ 1.3 million to the Political and Awareness Trust that reportedly funds political parties and "related causes."

Quoting the company's annual report for 2005, the CITU said the trust was a related party, as it was reportedly controlled by the Agarwal family (owners of Sterlite).

Contributions by a foreign group to political parties violated the law of the land, it said and demanded an investigation on such funding and the recipients' names. It also asked the Union Finance Minister — who has been on the Board of Vedanta Resources — to rescue himself and his Ministry of all decisions pertaining to Balco disinvestment.

Urging immediate intervention of the Prime Minister on the role of Vedanta Resources — a company listed in the London Stock Exchange — that now controls Balco as the Holding Company, CITU president M.K. Pandhe told reporters that the company, in its annual report, had admitted to paying money to various political parties.

Mr. Pandhe said the Prime Minister should direct the Government nominees in the Balco Board to take up the issue (based on the report) as special agenda item at the next Board meeting.

Mr. Pandhe also drew Dr. Singh's attention to the finding of a report "Impact of privatisation of Labour: A study of Balco Disinvestment'' published recently by V.V.Giri National Labour Institute, an autonomous body under the Labour Ministry.

The report says that most of the labour-related provisions in the shareholders agreement between the Government and Sterlite had been flouted. It pointed to specific cases of coercion, and harassment of those who were forced to accept voluntary retirement with deferred payment.

The report says that the Sterlite management lagged behind in social responsibility. It pointed out the closure of a junior school, following poor enrolment, and its subsequent use by the company as a godown. "As a matter of fact, subsequent to the discussions with central trade unions in 2002, the then Prime Minister constituted a fact-finding committee on the matter which in its report felt that the strategic partner did not pay sufficient heed to the spirit of the shareholders agreement, which protects the interest of the workers,'' the CITU said.


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