MAC: Mines and Communities

India Update

Published by MAC on 2006-12-10

India Update

10th December 2006

One of the longest and most embittered struggles by India's Advisai (tribal peoples( to assert rights over their territory is coming to a climax. For more than three years the Dongria Khonds in Lnjigarh, Orissa, have resolutely fought UK-listed Vedanta Resources' plan to mine their sacred Nyamgiri hills. A final decision is now likely to be made by the Supreme Court in early 2007. But this is far from the whole story…

Coal and diesel power generation is blighting the very substance of India's existence - its rice crops. Yet, this revelation isn't deterring the government from seeking new coal deposits outside of the country, or plans to further privatise its domestic resources.

Nyamgiiri in the balance

India's Supreme Court has finally held a hearing into the proposal to mine bauxite in Orissa's Niyamgiri Hills, made several years ago by Vedanta Alumina. After the Central Empowered Committee (CEC) submitted its report, the Supreme Court in February 2006 had referred the matter to the Forest Advisory Committte (FAC) and ordered detailed assessments. This was to be done in 3 months. Following this, assessments by two institutions were carried out: Wildlife Institute of India, Dehradun (on Wildlife aspects) and Central Mine Planning & Design Institute Limited (CMPDI), Ranchi (on mining aspects). CMPDI is a subsidiary of Coal India Limited.

Based on these two reports, in October 2006 the FAC gave its approval for the diversion of forest land for the project, subject to conditions This was highlighted by Mukul Rohtagi, advocate for Vedanta at a hearing last week in Delhi . He added that the bauxite reserves in Orissa and Niyamgiri Hills are largest in the world and that they want to exploit it scientifically. Further, the company has already invested in the area by setting up schools, colleges and a refinery. However, the company does not have mining rights. On enquiry from the court the advocate clarified that the Refinery cannot function without mining and that China has many such industries.

The Supreme Court enquired as to whether the CEC has looked at the reports. Mukul Rohtgi responded that all the issues raised have been examined by the reports which was ordered as further enquiry following the CEC report.

UU Lalit, Amicus Curaie brought to light that 1st report of the CEC was against the mining, following which the court had asked for additional details in February 2006. This was because the proposals were full of manufactured details, data and permissions. This fact can be established in the court. He also added that the as per the 30.11.2006 order of the Supreme Court, all decisions of the FAC are to be reviewed by the freshly constituted FAC as the current FAC was not according to the required composition. The decision on the mining in Niyamgiri Hills is also one such decision which requires a review by the newly constituted FAC.

The advocate for Vedanta was not supportive of the idea of the matter being re-examined by the new FAC, as it is just going back and forth and there are delays.

The Supreme Court asked the CEC if they were per se against the project or are looking at procedural issues that can be resolved. The response of the CEC was that based on the facts of the case, they are per se against the project. The CEC was given 7 days time to respond to the two reports prepared by WII and CMPDI. The advocate for the applicant asked for the copies of the report to file a response, which was refused.

It was finally decided that all the reports, including the first one by CEC, the ones done by WII, CMPDI and CEC's comments on it, will be presented before the newly constituted FAC (to be constituted by 15th December), following which they can consider the matter. The matter will be listed in January 2007. [Information from Forest Case Update, India, December 2006]

Comment from our correspondent in Orissa (December 10 2006):

The WII Report, circulated over 2 months ago, was quite clear that mining on Niyamgiri is unacceptable. Four weeks ago a small article appeared in the Oriya (Orissa) press stating that the WII has revised its Report, and that it now concludes there will be no serious impact from mining.

On 1st October hundrds of tribal people gathered on Niyamgiri's summit, in the mining lease area, to swear an oath not to allow their mountain to be mined. The Dongria Konds, who live throughout the Niyamgiri range and only there, have a profound understanding of the fertility which flows from the mountains through streams. The trees cover the water-retentive bauxite soil, which captures and retains water, right up inside the mountain. Countless streams flow down the mountain throughout the year, rich in mineral nutrients. It is known that deforestation & blasting would damage this water-holding capacity.

The forest is significant for its wildlife, including elephant, tiger, leapard, bear, wolf, king cobra and monitor lizard. It was recommended for sanctuary status in 1997, just before a deal was made with Sterlite/Vedanta in 1998 (a Memorandum of Understanding).

The CEC also pointed out that construction started on Vedanta's refinery before the company got legal clearance, and questioned whether it should be allowed, since it is sited right at the source of the Bamsadhara river, where it forms out of streams descending from Niyamgiri. Toxic Red Mud and ash ponds that have been dug will inevitably affect the river and ground water.

In recent weeks many lorries have been carrying bauxite to Lanjigarh from rail stations in the vicinity. This bauxite originates from mines operated for Vedanta under contract in Chattisgarh (about 1,000 kms away). These mines are on mountains in Surguja & Kawardha Districts (N & W Chattisgarh), where they are worked in hazardous, sub-standard conditions by tribal labourers whose villages & land, up on the mountain plateau, are being encroached upon by the mines.

Last week a report in the Oriya newspaper"Samaj" reported Naveen Pattnaik (Orissa's Chief Minister) as meeting with the "Industry Gurus", asking their advice on how to develop Orissa's exceptional mineral resources.

Vedanta project under fresh scrutiny

Times of India

9th December 2006

NEW DELHI: The Rs 4,000 crore bauxite and alumina refinery project of Vedanta Aluminium, a unit of London-listed Vedanta Resources, will now face > scrutiny by the central empowered committee (CEC) and forest advisory committee (FAC) under the environment law.

This was ordered by the Supreme Court on Friday after the Forest Bench comprising Chief Justice Y K Sabharwal and Justices Arijit Pasayat and R V Raveendran took into account the strong opposition to the project by CEC on the ground that it will harm the ecology of the forest area in southern Orissa.

The court accepted Solicitor General G E Vahanvati's suggestion on behalf of the Centre that CEC could give its objections to the technical committee report clearing the project and the same would be placed for consideration of the FAC, which is likely to be constituted by December 15.

The technical committee had given its clearance after the Wildlife Institute of India (WII) in its impact assessment report had cleared the project to be located at Lanjigarh.

In its report to ministry of environment and forests, WII had green signalled the project but with advisories ranging from taking care of the elephant habitat to managing the natural springs and tribal life.

However, CEC, which was opposed to it right from the very beginning, maintained that the project would be harmful for the environment.

Air Pollution Hurts India's Rice Crop - Study

PlanetArk US

5th December 2006

WASHINGTON - Air pollution caused by the burning of fossil fuels like coal and diesel has contributed to a worrisome slowdown in rice harvest growth in India in the past two decades, scientists said on Monday.

The researchers said the findings suggest reducing so-called atmospheric brown clouds, formed from soot and other tiny airborne particles belched into the air when fossil fuels are burned, would help improve rice harvests to feed India's 1 billion people.

India has an acute problem with this type of pollution, which previous research showed can cut rainfall and lower temperatures. Writing in the Proceedings of the National Academy of Sciences, the researchers said harm from this air pollution has combined with broader global warming effects from greenhouse gases such as carbon dioxide to squeeze India's rice harvest.

"If we let air pollution levels get worse, these effects are going to get larger," University of California-Berkeley scientist Maximilian Auffhammer, one of the researchers, said in a telephone interview. "If we don't do anything about this, things are not going to get better."

India is one of the world's major producers of rice. Broad agricultural improvements boosted India's rice harvests in the 1960s and 1970s, making it self-sufficient in its staple food. The annual growth rate peaked at 2.7 percent in the mid-1980s. Growth has eroded since then, prompting worry about potential food shortages in the densely populated and poor country.


India's rice harvest would have been more than 14 percent better from 1985 to 1998 without the negative combined effects from the burning of fossil fuels and broader climate warming, the researchers said.

"I don't think it forecasts immediate doom and mass starvation or anything like that," Auffhammer said. But he warned India's rice self-sufficiency could be threatened even as some experts forecast that its population will top China's by the middle of the century. There have been other explanations offered for the slowing rice harvest growth, including falling rice prices, deteriorating irrigation infrastructure and soil degradation.

Auffhammer and University of California-San Diego scientists V. "Ram" Ramanathan and Jeffrey Vincent examined historical data on India's rice harvests and gauged the combined effects of atmospheric brown clouds and greenhouse gases on growing conditions. The combined effects of the two types of pollution were decidedly negative.

The research indicated that the cooling effect of the brown clouds actually helped rice harvests by partially offsetting the warming effects of greenhouse gases, but not nearly as much as the drying effect from these clouds hurt the harvests.

Some climate scientists have worried that reducing brown clouds and their cooling effect could harm crops by intensifying the warming caused by greenhouse gases. But this study indicated any negative impacts of intensified warming would be outweighed by positive effects of greater rainfall.

"I don't want to start some big stink, pointing fingers at the Indian government saying air pollution policy is something that should have been done," Auffhammer said. "But (I'd) rather say, 'Here's the effect,' and this presents an incredible opportunity to (make) policy."

Story by Will Dunham


India shortlists 4 countries for coal mine buys

Financial Express

4th December 2006

NEW DELHI, DECEMBER 4: India has shortlisted four countries in which it may consider buying coalmines as it grapples with growing domestic demand from power plants to fuel a booming economy, a top government official said on Monday.

"We have shortlisted Mozambique, Zimbabwe, Indonesia and Bangladesh for acquiring coal mines," H.C. Gupta, coal secretary, told reporters on the sidelines of an industry conference.

Gupta said India would import 35 million tonnes of coal in the financial year that ends in March 2007, about the same amount as it purchased last year. Power companies account for 70 per cent of India's total coal consumption.

"We are looking at a production of 400 million tonnes of coal in 2006-07, which is four times the size of the country's production 30 years ago," Gupta said. He added coal consumption would reach an annual 1.2 billion tonnes by 2021.

"India's increasing need of coal provides an immense opportunity to investors as public and private sector companies are eager to help the country raise coal production," he said.

State owned companies account for 90 per cent of production.

"We have identified 140 blocks and 30 billion tonnes of reserves for captive use by the private sector. Altogether 50 billion tonnes of reserves will be there for both public and private sectors for captive mining," Gupta said

Coal mining opened up to private investment


29th November 2006

NEW DELHI: The government has opened the doors for private investment in the coal sector by allowing domestic and overseas mining companies to directly access captive coal blocks reserved for cement, steel and power sector players.

In all, 38 coal blocks with reserves of over 6 billion tonnes have been earmarked for allocation under the new dispensation that is expected to see interest from multinational biggies like BHP Billiton, Rio Tinto and domestic companies like Sesa Goa, Runta Mining, Essel Mining.

According to official sources, guidelines for allocation of captive coal blocks have been amended and under a new entry norm standalone mining companies (both domestic and overseas) have been permitted to apply for captive coal blocks. The only condition put is that these companies should have tied up supply contracts with one or more companies in the cement, steel and power sectors.

As per the changes in the guidelines, multinational companies could also bid for these captive blocks, if they have already set up an Indian arm or propose to do so within a specified period of time.

At present captive coal blocks are only allotted to companies in the power, cement and steel sectors and they in turn are free to form joint ventures for undertaking mining. The government has also allowed 100% FDI for captive mining in these sectors. That apart, entire coal mining is carried out by government companies.

Sources said that applications for the 38 coal blocks have already been invited. "We expect the first standalone mining company to begin work on its block in mid-2007," said sources.

Of the 38 coal blocks on offer, 15 blocks would be given to a company which have tied up contracts with power companies and 23 blocks to those having supply contracts with iron and steel companies. The change in guidelines for allocation of captive coal blocks follows favourable opinion in this regard from the law ministry which suggested that changes could be made without amending the Coal Mines (Nationalisation) Act, 1973.

Since 1993, less than 100 coal blocks have been allocated for captive users. However, 109 more coal blocks have been identified now for allocation under the captive route with total reserves of over 30 billion tonnes. More than 40 of these are Coal India blocks that have been dereserved in favour of captive users. With this, production of coal under captive use is expected to increase to about 200 million tonne annually from the present level of a mere 14 million tonnes.

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