MAC: Mines and Communities


Published by MAC on 2005-11-03


The "offending" Open Letter which never made it into the Financial Times:

Nostromo Minerals Research
41 Thornhill Square, London N1 1BE
United Kingdom
Tel: +44-207 700 6189

To: The Editor
Financial Times

November 3 2005

From Mr Roger Moody and Eighteen Others


On October 19th you published an article (“Vedanta ready to invest $2bn in aluminium plant”), followed in your November 2 Aluminium Supplement by a further examination of some activities of UK mining company, Vedanta Resources plc (“Intent on shaking up the industry in India”).

The first article was based on an interview with Anil Agarwal, Vedanta plc’s executive chairman and 54% share-holder. It conveyed a strong impression that the company will shortly embark on construction of an aluminium smelter in the Indian state of Orissa, and do so without let or hindrance. In fact, the official Public Hearing into this project, scheduled for October 20 2005, was postponed without a new date fixed. This is because a 20 MW coal-fired power plant, integral to the project, was left out of the Environmental Impact Assessment and .because the smelter is directly linked to a refinery and putative bauxite mine in Orissa. Your correspondent,. Rebecca Bream, rightly says that the Nyamgiri mine has been condemned by the Central Empowered Committee (CEC) of India’s Supreme Court. However her statement that the refinery “seems to have overcome opposition” is incorrect.

On September 21 the CEC recommended an immediate cessation of work on the refinery, accusing Vedanta of falsifying vital information, destroying part of a protected forest, and commencing construction work without receiving legal clearance. The Supreme Court is expected to deliver an order on both the refinery and mine within the next two months. If it takes the CEC’s emphatic advice, Vedanta will effectively have no aluminium project in Orissa - at least in the foreseeable future. The Supreme Court of India has a record of making pro-environment judgments.

In its half yearly statement, published on October 13, Vedanta plc willfully misrepresented the current situation. It not only announced that construction of the refinery is "progressing on track" and " currently 60% complete", but that "the process of obtaining the necessary environmental approval for the mine will now move forward". The opposite is likely to be the case.

Your correspondent additionally referred to Vedanta opening a new copper smelter at Tuticorin earlier this year. In fact, the company has operated a smelter on this site since the late nineties. In April it doubled the plant’s capacity to 300,000 tonnes: an expansion which another committee of the Supreme Court (the Hazardous Wastes Monitoring Committee) has declared to be illegal.

As Ms Bream points out (November 2) yet a third expansion is now nearing completion - that of the Korba aluminium smelter operated by Vedanta’s subsidiary, Balco, in the state of Chhattisgarh. This too has been the subject of an indictment, first by a local government committee in February and, on October 20, by the CEC, which found that the company had “encroached 1000 acres of land in complete violation of the Forest (Conservation) Act, 1980” and cut down “about 50,000 trees.“

Vedanta is now trying to raise a substantial amount of new investment. Potential investors, existing shareholders, and those concerned about India’s environment and the rights of its people, deserve to have objective information on the company’s activities and prospects, some of which we have tried to provide here.

Yours etc. (in alphabetical order of first name):

Aman Namra, Delhi
Amit Srivastava, India Resource Center, USA
Andrew Whitmore, Concerned Shareholders of Vedanta plc, Nottingham UK
Ashish Fernandez, The Ecologist, India
Bidulata Huika, Orissa, India
Debaranjan Sarangi, PSSP, Orissa
Dr Felix Padel, social anthropologist, UK
Gerard Oonk, Director, India Committee Netherlands
Hemant Badgandi, Association for India’s Development (Tucson Chapter), USA
Kundan Kumar, India
Madhumitta Dutta, Corporate Accountability Desk, The Other Media, Chennai
Madhu Sarin, India
Manshi Asher, India
Nick Mole, London, UK
Prasad Boddupalli, India
Roger Moody, Director, Nostromo Minerals Research, London, UK
Samit Kumar Carr, India
Sidharth Naik, Convenor, Kalahandi Nagarik Sacheta Manch, Bhawanipatna, Orissa
Theo Bouma, Programme Director, Oxfam Novib, Netherlands

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