MAC: Mines and Communities

Jindal and BHP Billiton in Andhra Pradesh

Published by MAC on 2005-07-14

Amid allegations of a violation of tribal peoples' rights, impending environmental destruction, tax-dodging and kickbacks, the Indian steel company, Jindal is being "fast tracked" towards a huge alumina refinery in the state of Andhra Pradesh.

But this isn't all. The world's biggest mining company, BHPBilliton is also poking its snout into the trough.

Australian firm proposes alumina refinery at Vizag

The Business Standard

July 14, 2005

Hyderabad - Australian-based BHP Billiton today proposed to set up a huge alumina refinery plant with a capacity of 3 million tonnes per annum near Vizag, at an estimated investment of over $ 2-3 billion, if the Andhra Pradesh government agrees to provide sufficient bauxite reserves besides SEZ status among other things.

Rody Sale, consultant of BHP Billiton along with other members of the company, met chief minister Y S Rajasekhara Reddy here on Wednesday and gave a presentation on their proposal in the state to him.

BHP sought an allocation of a whopping 300 million tonnes of proven bauxite reserve for the first phase of the project. It may be recalled that the state government recently signed an MoU with Jindal group on setting up of a refinery and smelter plant with the production of about 2.5 lakh tonnes of aluminium.

As per the projections of the company team, government revenue due to alumina refinery in the first five years would be Rs 2,700 crore while it would be Rs 20,250 crore on the aluminium smelter over the life of the project. Direct employment at peak is estimated at 1,800 persons.

However, the government, on its part, has not made any commitment with regard to the allocation of bauxite reserves as required by the company during the presentation. When contacted, Sabita Reddy, minister for mining, said that priority would be given to the public sector Nalco company.

"We will consider the proposal of the BHP only if Nalco backs out of its plans," she said, adding that a final decision would be taken in a couple of months time.

Considering the total quantum of over 600 million tonnes of bauxite reserves available in the state, the government is of the view that only two projects can be accommodated. Jindal group has been allocated over 240 million tonnes of bauxite reserves.

Nalco representatives had met the Reddy in April, 2005 and expressed their interest to set up alumina and aluminium plants in Andhra Pradesh.

Bauxite mining is disastrous: NGO

The Hindu

July 19 2005

Rare flora and fauna may disappear

* Displacement of aboriginal people from agency area
* Protection of soil and moisture of hills to be impaired
* Mining areas is the catchment to important rivers
* Water resources, ground water will be depleted
* Job opportunities to trials to be limited

Samata, a social action group fighting for tribal rights, on Monday said that the agreement signed by the State Government with the Jindal Group to undertake mining of bauxite deposits in Visakhapatnam district would cause serious environmental destruction to the ecologically fragile Eastern Ghats.

Known for winning famous Samata judgment in the Supreme Court against mining by Birla Percales in Nimmalapadu area in 1997, the NGO’s executive, director, Ravi Rebbapragada, said that the project, if implemented, would hit tribal lifestyle and lead to displacement of aboriginal people from the agency area.

Catchment areas

Mr. Ravi told reporters that the mining area was the catchment to important rivers like Sileru, Matchkhaund amd their tributaries, the Gosthani and Sarada.

“ Rare and important flora and fauna like Indian Gaur, endangered bird species like Athera Belwetti, golden gecko and others would become extinct due to the disturbance to their natural habitant,” he said. Pointing out that the hills with bauxite reserves grnerally act like a hard cap to protect the soil and moisture of these hills, he said once the laer was removed it (large scale mining) would completely denude the soil and biodiversity, besides dangerously affecting the water table.

Taking strong exception to the public impression being created by the authorities that mining would lead to economic prosperity of the tribals and create more job opportunities, he said that Samata would sensitise prople on how mining in Damonjodi and other areas of Orissa had crated only a few handful of jobs for the locals due to the sophisticated machines used in mining.

NGO opposes Jindal project

The Hindu Business Line

Tuesday, July 19, 2005

Visakhapatnam - SAMATA, an NGO working in the agency area of Visakhapatnam district, has urged the State government to scrap the MoU signed recently with the Jindal group for ecploitation of bauxite reserves in the region and setting up a smelter here.

At a press meet here on Monday, Mr Rebbapragada Ravi, Executive Director, said that the Government had signed the MoU with the Jindal group in a hurry. "It will result in an ecological disaster in the tribal tracts in the Easternghats. The economic benefits resulting from the project are elusive and in any event they will not reach the tribals," he said. He said bauxite mining in Orissa and elsewhere had left a trail of destruction and the tribals were effected. Jobs promised to the tribals were not given, but the mining sites were completely destroyed.

Water resources in the tribal tracts would be damaged beyond repair. "As it is, the suface run-off is very high in these areas and the ground water will be completely exausted. Vizag is facing water scarcity and it will be aggravated. The mining has to take place in the catchment areas of rivers and rivulets in the agency such as Gosthani, Varaha, Yeleru and Sileru," he said

Most of the jobs would be technical and in the modern mechanized mining sites there was very little scope for tribals getting employed, he said. The prject would change the entire ecology of the region and should be opposed by all, he peaded.

Samata and other groups would take up a similar campaign against the Jindal project, he added.

Bauxite mining will spell disaster: MLA

The Hindu - Staff Reporter

July 4 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.

A tax free project?

The Hindu Business Line

July 2 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.

First Mega fast track project for Vizag MoU signed with Jindal South West Holding Limited for establishing a smelter and a refinery

The Hindu

July 8 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.

Kickback charges on bauxite deal with Jindals denied

The Hindu Business Line

July 15 2005

Hyderabad - Refuting the allegations of Opposition parties, the Andhra Pradesh State Mines & Geology Minister, Ms P. Sabita Indra Reddy, has denied kickbacks to the Chief Minister in offering bauxite-mining facilities to the O.P. Jindal Group-owned Jindal South West Steel (JSW).

She termed the allegations of Opposition parties, especially Telugu Desam, as 'baseless' with regard to the MoU signed with JSW for the Rs 9,500-crore aluminium plant in Visakhapatnam.

As the area with bauxite reserves in the State came under the notified tribal zone, it could be leased out only in favour of tribals or State-owned enterprises as per Supreme Court directives.

Accordingly, the AP Government had decided to offer lease rights to the AP Mineral Development Corporation (APMDC) and sell the bauxite to the aluminium companies.

The Minister said the Government initially planned to offer the bauxite mining rights to the State-owned National Aluminium Company (Nalco).

However, since Nalco had enough reserves of bauxite, the Government negotiated with Jindals. The APMDC would supply the required bauxite to JSW's proposed aluminium plant at Visakhapatnam as per the MoU signed with Jindals.

The Government would strive to ensure basic amenities to the tribals in the bauxite mining area in the form of schools, hospitals and other social infrastructure even before the JSW project takes off in the area, the Minister said.

The JSW project would offer employment to 3,000 directly and over 10,000 indirectly. Of this, a majority of jobs would be offered to the local tribals.

Further, in terms of the current regulations, nearly 40 per cent of the royalty received from bauxite mining would be spent on tribal development initiatives, she said.

NGO, tribal body join hands against bauxite mining - Stage protest in front of Anantagiri mandal office

23rd July 2005

Staff Reporter, The Hindu

· Mining in agency contravenes of the 1/70 Land Regulation Act
· Mining likely to endanger the rare species, flora and fauna

Andhra Pradesh - Visakhapatnam - Samata, an NGO and Andhra Pradesh Girijana Sangham (APGS) on Friday joined hands opposing bauxite mining in the agency area of Visakhapatnam district.

The two held a rally, staged a dharna at the Anantagiri mandal office and organised a rasta roko and foiled an "urgent meeting'' on "mining awareness'' called by the MRO for mandal presidents, ZPTC and MPTCs, sarpanches and village secretaries of Anantagiri mandal by continuing the protest till 3 p.m.

Those called for the meeting did not turn up owing to the protest. Girijans from Beesupuram, Gatuvalasa, Katika, Barjala and Yeguva Sobha participated in the protest opposing the bauxite mining in Galikonda and Raktakonda of Borra and Yeguvasobha panchayats and raised slogans against the proposed alumina plant.

The protest was led by APGS president and secretary T. Ananda Rao and D. Gangaraju respectively and Samata president P. Devullu and G. Srinivas.

The APGS has been organising a padayatra in the agency are to create awareness on the threat posed by bauxite mining.

Samata, and APGS have been opposing bauxite mining in the agency area in contravention of the 1/70 Land Regulation Act applicable for tribal areas. In the "Samata judgment'' the Supreme Court has clearly stated that only the Government, public sector undertakings and local tribal societies were empowered to take up mining.

Tribals from Orissa had been coming to the Visakha agency after mining was taken up there and due to other projects during the last five decades.

On the ecological front, rivers like Machkhand, Sileru and Gosthani originating in the agency would go dry because of the mining which would endanger the rare species, flora and fauna.

Tribals to spearhead movement against bauxite mining

Friday, August 05, 2005

Correspondent: Santosh Patnaik, The Hindu

G.K. VEEDHI (VISAKHAPATNAM DT): Slogans like "Jaraga nivvam, bauxite tavvakalu jaraga nivvam'' (we will not allow digging of bauxite) rent the air as a motley crowd of 500 girijans braving intermittent rain attended a meeting here on Thursday to mark valedictory of 15-day padayatra by the Andhra Pradesh Girijan Sangham (APGS).
Even as the entire agency belt is under the grip of malaria and viral fever, the tribals attended the meeting and vowed to launch an agitation against the agreement signed by the State Government with the Jindal Group to allow establishment of an alumina plant in Visakhapatnam district at a cost of Rs. 9,000 crores.

During the 300 km.-long padayatra by a 20-member team of APGS in 16 panchayats covering 120 villages, village protection committees were formed to sensitise girijans to thwart the move to take up mining in the bauxite-rich agency area.

The APGS along with local NGOs will launch the second phase of padayatras in Anantagiri and Araku mandals from August 13.

"Bauxite excavation in the hills will make our agriculture fields barren making our hill streams dry. The move will displace us,'' Ganella Ganapati, who heads Dharmavaram Village Protection Committee, told The Hindu.

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