MAC/20: Mines and Communities

India mining updates

Published by MAC on 2005-09-06


Over the past months an unprecedented number of iron ore/steel, bauxite (and now chromite) proposals have been made in India. They are coming at such a rate, and with such lack of warning or foresight, that one might suspect companies and some politicians of seeking both to bombast and blast their way against the opposition - even violating the country's constitution in the process.

But the industry and its lobbyists are not going to have it all their own way.

New iron ore mining policy on the cards

The Hindu Businessline

Sept. 5 2005

Kolkata - The Union Ministry of Mines is actively considering the introduction of a new iron ore mining policy for ensuring easy availability of ore by iron and steel manufacturers in the non-iron ore-bearing States.

Indicating this, Mr Amit Kiran Deb, West Bengal Chief Secretary, said that the Chief Minister, Mr Buddhadeb Bhattacharjee, had recently been informed of the development during a meeting with the Prime Minister in Delhi. Mr Deb said that prospective investors were at present finding it difficult to set up steel plants in non-ore bearing States because the iron-ore States had taken a stand against allowing ore to move out from their States if the steel plants were not located in their territory. In fact, this sort of stand posed a problem for implementation of the O.P.Jindal group's proposal of a 4.5 million - tonne-per-annum capacity steel project in West Bengal.

Mr Deb said that although the State Government had been assured by the Jharkhand Government that iron ore would be supplied to the Jindal group, the Centre's new iron ore policy would encourage fresh investors to enter the steel sector in non-iron ore bearing Sstates. It may be noted that almost all iron ore bearing states do not have the necessary infrastructure required to set up large modern steel plants.

Addressing an interactive session on 'Visions for industrial resurrection of West Bengal,' organised here on Monday by the Bharat Chamber of Commerce Industry, Mr Deb said that the State Chief Minister had recently urged the Prime Minister to direct the Union Ministry of Coal and Coal India Ltd (CIL) to hand over abandoned large coal mines under the jurisdiction of CIL in the state to West Bengal Mineral Development Corporation (WBMDC) so that coal still available in these mines could be utilised by the corporation to meet the requirement of steel and sponge iron projects.

He said that West Bengal was undergoing a steady industrial resurgence although it was finding it difficult to arrange for adequate land to set up new industries. About 76,000 registered companies were at present operating in the State while new investment proposals were coming in sectors like IT and ITES, food processing, leather, steel and tourism. Among the certain negative factors in the State vis-à-vis new investments were inadequate infrastructure, militant trade union activity and the State's weak financial position, he added.


Tata Steel to invest up to Rs 55,000 cr in Jharkhand

Varun Sood, New Delhi - India Press

September 06, 2005

Prospective sites for Tata Steel's second 10 million-tonne- per-annum capacity steel plant has finally narrowed down to Chandil or Manoharpur in West Singhbhum district of Jharkhand.

Officials in the Jharkhand government maintain that Tata Steel, which plans to invest Rs 45,000-55,000 crore in two phases spread over nine years, is eyeing a site at either of the two places.

For the past few weeks, the two places are said to have hosted an unusually high number of Tata Steel executives. "The company has decided to set up the steel plant in Manoharpur or Chandil," said an official.

A Tata Steel spokesperson refused to comment on the development, saying that details will be known as and when the Memorandum of Understanding (MoU) is signed between the state government and the company.

The Jharkhand government has already shown an interest in setting up a 10,000 acre steel industries park at Chandil.

Manoharpur is about 150 kilometres from Jamshedpur. The region is known to have rich iron ore deposits.

'With closer proximity to iron ore mines, the steel plant has the advantage of reducing its transportation costs,' said a mining expert.

Tata Steel already has captive iron ore mines at Noamundi, Joda and Khondbond.

Inspection of the sites has already been completed by Tata Steel team, led by RP Singh, projects vice-president.

The feasibility study was commissioned to consultancy firm MN Dastoor & Company.


Orissa govt to open chrome ore mines to private bidders

Varun Sood, New Delhi - India Press

September 06, 2005

The Orissa government may be asked to open some of the chrome ore mining fields of the Orissa Mining Corporation (OMC) to private bidding.

This is in accordance with the final recommendations of the Dang Committe to the steel ministry. This, the committee said, was to augment the overall reserves position with private participation.

In the report, the committee said large reserved areas should be opened for "competent reconnaissance permits, prospecting license or mining license applicants".

The move will also be in line with the provisions of the Mines and Minerals Development and Regulation (MMDR) Act. A reconnaissance permit is granted for preliminary prospecting of a mineral for a period of three years and for a maximum area of 5,000 square kilometres, to be relinquished progressively.

The holder of this permit has preferential rights to obtain prospecting licence in the area concerned.

Areas where public sector companies had time-bound exploration programmes could be retained unders reservation, it said.

"All other areas should reserved for the OMC, both in the Sukinda valley and elsewhere in the state", it added. Almost 98 per cent of chromite ore deposits of the country are in the Sukinda valley of Orissa.

Expressing optimism at this recommendation, an industry executive said, "This will require de-reservation of areas at present reserved for OMCs but which OMC cannot themselves systematically cover within a reasonable time".

The panel also suggested to put through accelerated time-bound geological investigations to prove the entire extent of known ore-bodies and look for additional ore-bodies in new areas.

Apart from this, the panel has recommended a technical review of lease boundaries vis-à-vis chrome ore bodies in the Sukinda valley.


Dang Panel Recommends Considering Greenfield Steel Plants in Fifth Schedule Areas

Sudha Nagaraj, New Delhi - Indiapress

6 September 2005

BY recommending special consideration for greenfield steel plants that are to be located in Fifth Schedule areas — meaning areas where tribals live — the R K Dang Committee has opened a Pandora’s box, bringing into the open contentious issues related to community rights, ecological destruction and conservation of natural resources for local benefits. While this may contravene the famous Samata Judgement of 1997, Committee chairman R K Dang told ET, “My recommendation is independent of the Court case.”

The recommendation — if accepted — could be seen as another attempt by the Centre to meddle with Schedule V of the Constitution to enable leasing out of tribal land to non-tribals. Schedule V of the Constitution prevents violations of the rights of tribals.

Tellingly, the Dang Committee has made it clear that while the Centre is vested with enough powers to give such preferences (while alloting mining leases) as spelt out by the Panel, it would be better to get it legally cleared. “As a matter of abundant precaution and subject to the advice of the Attorney General and Ministry of Law and Justice, the entire set of preferential guidelines as may be modified or accepted by the government should be taken before the Supreme Court of India for cognisance and in order to ‘subsume all existing and pre-empt all future contentious litigations’ in individual High Courts,” the report adds.

To recap briefly, eight years ago the Supreme Court had ruled in favour of an Andhra Pradesh based NGO, Samata and held that any transfer of land (immovable property) from tribals to a non-tribal person was null and void. It had ruled that the term “person” included government and that immovable property also included prospecting and mining leases. While the case pertained to Andhra Pradesh, the Apex Court gave directions that all other state governments should adhere to the ruling.

Says Dang, “I have lived with tribals and I am most sensitive to their needs. I think Schedule V read together with Article 244 of the Constitution in fact backs any affirmative action to uplift tribals. A steel plant based on iron ore in such areas would bring benefits to tribals. Subject to adequate environmental precautions, there is no reason why local industrial activity cannot be encouraged. Let my recommendation take the test of law.”

His argument echoes what several voices in the government have expressed before. In fact, the issue has resurfaced several times with governments attempting to subvert the Samata judgement. Says Ravi Rebbapragada, executive director, Samata, “There was a move by the ministry of mining to amend Schedule V of the Constitution to prevent restrictions on transfer of land to governments.”

The judgement had also held that a state instrumentality or tribals society may be allowed to engage in mining activities — in compliance with Forest Conservation Act and Environment Protection Act. “This is often misused with subleases being given out by state-owned mining agencies to private parties. The fact is even lease is transfer of land, according to the judgement,” says Rebbapragada. A similar controversy arose during the Balco disinvestment, but the transfer of 51% shares to Sterlite Industries was upheld by the Supreme Court as the land transfer to the government was done years ago.


Bauxite mining: AP Girijana Sangham wants MoU scrapped

The Hindu Businessline

Sept. 4 2005

Visakhapatnam - The Andhra Pradesh Girijana Sangham (association of tribals) has urged the State Government to scrap the MoU signed with the Jindal group for exploitation of bauxite reserves in Visakhapatnam district and setting up of a smelter, as it will "jeopardise the livelihood of the Girijans and foul up the environment.''

The Sangham voiced the demand at a district-level seminar organised on the issue here on Sunday and all the political parties, barring the ruling Congress, supported the plea.

Mr V. Tirupathi Rao, President of the district unit of the Sangham, said the State Government had signed the MoU with the Jindal group. The association had taken up a campaign to educate the Girijans about the perils of bauxite mining and the necessity to stop the project.

A similar attempt had been made by the Telugu Desam Government in the past, but the united struggle of the Girijans and other organisations made the Government see reason and give up the attempt.

Mr M. Babu Rao, Member of the Lok Sabha from Bhadrachalam, and the State President of the Sangham, said that in accordance with the constitutional provisions, the State Government should have consulted local bodies and obtained all clearances, including eco clearance, before signing the MoU. "The decision was taken unilaterally and in violation of all stipulations. It should be fought tooth and nail," he said.

He said the Government was trying to fool the Girijans with promises of jobs in the project, but it would mean nothing but disaster for them. "The groundwater and surface water in the region will be polluted. The four of five rivulters in the region will be polluted. It will have adverse impact on the five coastal districts - Visakhapatnam, Vizianagaram and Srikakulam besides the two Godavari districts."

Mr G. Demudu, MLA representing Chitapalli, said the State Government was not really mindful of the interests of the Girijans in taking up the project, but those of the Jindal group. "Agro processing units can be set up in the region if the Government really wants to help Girijans," he said.

Mr M. Sundaram Patrudu, Telugu Desam leader, admitted that it was a fact that the previous Government had made an attempt to exploit bauxite reserves. "The Government then was misled by the officials, but bowing to the wishes of the Girijans and other sections of the public, the TDP Government had given up the proposal. But the Congress Government now is not responsive to the public opinion. We will support the agitation of Girijans," he said.

Mr M.V.S Sarma, the member of the State secretariat of the CPI (M), said the livelihood of the five lakh Girijans in the agency area of Visakhapatnam district was at stake and the Government should immediately scrap the MoU.

Mr J.V. Satyanarayana Murthy, District Secretary of the CPI, and Mr B. Ranga Mohan, BJP leader, expressed support to the agitation.

Earlier, Prof. M. Jagannadha Rao, of the Geology Department of the Andhra University, explained the perils of bauxite mining and the processes involved to the audience


State comes under fire for `unilateral' bauxite pact

Mining to adversely impact environment and livelihood of tribals

The Hindu

September 5 2005

Visakhapatnam, - CPI(M) (Communist Party of India-Marxist) to drum up support in Parliament against MoU with Jindal Group GSI survey reports about 500 to 600 million tonnes bauxite deposits in Easten Ghats - Loss of green cover and contamination of groundwater feared.

CAUSE FOR CONCERN: Member of Parliament Midiam Babu Rao receiving a representation from Girijan youth at a seminar conducted by Andhra Pradesh Girijan Sangham on anti-bauxite mining agitation in Visakhapatnam on Sunday.

CPI(M) MP Midiam Babu Rao on Sunday found fault with the State Government for signing a memorandum of understanding (MoU) with the Jindal Group for setting up an alumina plant and refinery in the district without consulting tribals and their representatives.

Speaking at a seminar on bauxite mining organised by the Andhra Pradesh Girijan Sangham (APGS), he said he would oppose the deal in the Parliament and try to drum up support of other MPs against the permission granted to Jindal Group to establish the plant and refinery at a cost of Rs. 9,000 crores.

Dr. Babu Rao said bauxite mining would not only destroy the environment but also affect the livelihood practices being followed by tribals for several decades.

Bauxite mines in the Eastern Ghats are said to be spread over an area of 1,400 km.

An estimated 75,000 tribals live in these areas. According to a survey conducted by the Geological Survey of India in 1979, the district contains bauxite deposits to the tune of 500 to 600 million tonnes.

Along with Dr. Babu Rao, CPI MLA G. Demudu, Telugu Desam Party district unit president M. Sundaram Patrudu, BJP city president Bandaru Ranga Mohan, CPI (M) State executive member M.V.S. Sarma and others also alleged that the deal was signed in a hush-hush manner without taking the tribals into confidence.

Andhra University geology professor M. Jagannadha Rao said huge bauxite deposits were confirmed in Galikonda, Rathikonda, Anantagiri, Chintapalle and Guttedu areas.

He said the deal struck with Jindal was unilateral and wondered how one could sign an MoU without an environment impact assessment (EIA) study.

Due to open cast mining, the lush-green forests in the Eastern Ghats would be destroyed besides changing the course of hill streams. The groundwater would get contaminated due to mining with increasing fluoride content.

Mr. Demudu said there was no difference in the approach adopted by the Congress and the TDP in opening the floodgates to bauxite mining. Despite a specific request by the tribal MLAs to Chief Minister Y.S. Rajasekhara Reddy not to allow any bauxite mining project, he went ahead with signing the agreement with Jindal Group, the MLA regretted.

Mr. Sarma, CPI district secretary J.V. Satyanarayana Murthy, Samata activist Srinivas, APGS leaders V. Tirupati Rao, Bhushana Rao, Laxman Rao and Appanna, spoke.

The Congress and the Bahujan Samaj Party representatives abstained at the all-party meeting convened by the APGS to discuss bauxite mining in the district on Sunday.


The galloping increase in dangerous and polluting sponge iron plants in India has stimulated resistance over three states

'No more sponge iron factories'

A report by: Manshi Asher, NCAS, Pune

September 5 2005

'No more sponge iron factories', this was the demand put forth by a group of 50 people from 3 states of Orissa, Chhattisgarh and Jharkhand after a day long meeting.

Individuals belonging to different non-governmental organisations, autonomous peoples' movements, media groups from Orissa, Chhattisgarh and Jharkhand came together on 1st September 2005 in a regional meeting in Orissa to discuss the adverse impacts of the growing sponge iron factories on the livelihoods and environment of these regions.

Sponge iron also known as direct reduced iron is extracted from iron ore and is used in the making of steel. With the rise in the global demand for steel over the past few years the sponge iron industry has also seen a boom. China is the one consuming large amounts of this steel as a part of its infrastructure building for the Beijing Olympics 2008 and Shanghai expo 2010. India is one of the hot spots for iron ore extraction and is the largest producer of sponge iron in the world today. The Central Eastern belt of the country including the states of Orissa, Chhattisgarh, Jharkhand and West Bengal is the key region for the growth of this industry.

The protests in these states have come up on the issues of land grabbing by these industries, especially in tribal areas; and air and water pollution in turn impacting local livelihoods. A preliminary study conducted by Sagar Dhara, an environmental Engineer, in Sukrili block of Mayurbhanj district, Orissa, in 2001 indicated carcinogenic contents in the discharge of Shivshakti Sponge Iron Plant. A movement opposing the plant that was initiated by the local women under the banner of Orissa Nari Samaj gained momentum in the area at the time.

Sagar Dhara, pointing out the environmental hazards of these plants said "Sponge Iron plants release hazardous pollutants like cadmium, nickel, hexavalent chromium (most dangerous through air and water), arsenic, manganese, and copper. The heavy metals in these particulate matters are most dangerous and can cause quick damage to fruit bearing trees, agricultural harvest and the human body especially the lungs".

In India 60% of the sponge iron units are small scale industries and many of them are under the unorganized sector. This, on one hand means that there is no protection to the rights of those who work as labour in these plants and on the other, that they lack the capacities to deal with hazardous waste from the point of view of prevention of pollution.

The Sponge Iron Manufacturers Association of Orissa claims that 37 000 people have been employed in these plants. On the other hand a study conducted by a group called Orissa Jan Sangathan indicates that almost 2 lakh people are affected adversely by these plants in 6 districts of Orissa.

In Orissa the most affected district is Sundergarh where almost 50 of these plants are concentrated. The district inspite of being a Schedule V area is facing a situation where land is being transferred to these companies without NoCs from the Gram Sabha (council of local villages). Even in areas where Gram Sabhas have attempted to oppose have not been supported by the local administration. In the year 2003-04 almost 4 plants had to withdraw or stop construction after strong opposition from the villages in the Gram Sabha. The main reason cited by the people for opposition was the large scale air and water pollution which had started affecting not only their health but that of their livestock, agriculture and land.

In Chhattisgarh, the state government in the last five years has signed a series of MoUs with various industries for the production of sponge Iron. Leading amongst these is the Jindal Power and Steel limited which also happens to be the world's largest producer of coal based sponge iron with a plant of 650,000 TPA capacity based in Raigarh town. Ramesh Agrawal, a resident of Raigarh and also an activist said that 50 sponge iron plants exist with a radius of 15 kilometers of Raigarh town.

The past year has witnessed growing unrest in the town as well as rural areas due to the pollution caused by these plants. In an effort to express this protest, about 10000 people mobilized for the Environmental Public hearing held for expansion of the Jindal Steel sponge iron plant in the district. "The District Pollution board blatantly violated all norms and guidelines laid down by the Ministry of Environment and Forests while conducting the hearing. And,.in spite of consistent opposition and efforts to draw attention of the state authorities and the ministry to this fact, the Centre recently granted clearance to the expansion project."

People expressed disappointment with use of judicial processes and mechanisms for recognition of their environment and livelihood rights . The struggle of Chauranga, a village near Raipur, the state capital managed to instill inspiration. Rama Shankar Chauhan, of Chauranga, narrated how their village managed to stop a sponge iron plant from coming up in their area. Said Chauhan "Almost 90% of the construction work was complete when we started realizing that this plant might not be good for our village. We had the experience of the neighbouring village where such a plant had affected grazing grounds and agriculture produce and fields. We had daily meetings and made a strategy for stopping the work. While the administration did not support us, after consistent opposition, the company owner realized that he would not be able to run the factory and decided to withdraw."

The story of Jharkhand was no different from the other two states. "So far 57 plants have been registered. Many are in the pipeline. 3 companies are bidding for captive mines as well as captive power plants along with SI plants" said an activist of Mines, minerals and People, an NGO. While the Jharkhand Industrial Policy 2001 talks of special incentives for industries like exemption from environmental clearance, there is no policy for how they would contribute to the local economy or adhere to pollution control practices.

One of these practices includes the installation of a technology called Electro Static Precipitators (ESP) in the stacks of the plant to control air pollution. Most of the plants have not installed this and even if any have running it is expensive because of its heavy consumption of power. "The Chief Minister of Chhattisgarh has assured that no more MoUs for SI Plants would be signed and that ESPs would be made compulsory for all plants. Despite this things continue to be the same" said Gautam Bandhopadhyaya, an activist of the Nadi Ghati Mukti Morcha, Chhattisgarh.

The meeting ended with the participants resolving to strengthen the mobilization against Sponge Iron Plants and plan a demonstration in Raipur in the winter session of the parliament with the slogan "No more sponge iron". The groups also concluded that there is a need to look at the issue of the sponge iron industry in the larger context of selling out of natural resources to domestic and foreign companies by the state without considering the impact on the local population and economy.

The meeting was organised at Sidharth village, Bhubaneswar, by by Orissa Nari Samaj and THREAD from Orissa and National Centre for Advocacy Studies, a resource centre based at Pune.

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