MAC: Mines and Communities

India update

Published by MAC on 2008-02-15

India update

15th February 2008

Scrutinising payments of business bribes to governments, in order to get mineral projects up and running, is a key part of the brief of several global bodies - including Transparency International and the EITI (Extractive Industries Transparency Initiative). However, too often, the equally insidious provision of gifts on the ground to local officials and community members, gets ignored.

According to the Times of India, it's such gift-giving which "keeps the Orissa forest department running...on a regular basis and in good numbers from select mining companies."

India's biggest iron ore producer is planning to buy a deposit in Canada as domestic supplies dwindle; while other Indian miners are now setting their sights on Mongolia..

Orissa forest department runs on 'gifts' by mining firms

The Times of India

11th February 2008

NEW DELHI: Gleaming Scorpios, Boleros and Ambassadors, glitzy motorcycles and gadgets to make an office comfortable - ACs, faxes, photostat machines, computers and almirahs.

These are what keep the Orissa forest department running and what it receives on a regular basis and in good numbers from select mining companies. Needless to say, it's a quid pro quo compromising its role as an arbiter.

The department decides if a company can mine in the out-of-bound forests, and what makes its role critical is the fact that the richest mineral deposits are buried underneath the green belt.

In what is unprecedented even in government annals, Orissa forest department has for years been "officially" asking mining companies to "provide" everything from SUVs to bookshelves. And, the companies have obliged.

Documents accessed by TOI show that the head of the state forest department - the principle chief conservator of forests (PCCF) - still drives around in a Scorpio provided by Jindal Steel and Power Limited and an Ambassador gifted by Nalco.

He is not alone in this blatant violation of government rules. In just two years, 2005-2007, senior officials under the PCCF received 12 vehicles from companies like Tata Steel and even state-owned Orissa State Mining Corporation.

While the senior officials got their four-wheeled gifts, their subordinates had to make do with motorcycles.

Range officers - field level staff involved in patrolling the forests - records with TOI show, had a thing for Yamaha motorcycles.

But the spree of gifts does not end at motorbikes and expensive cars. Various officials in the Orissa forest department have demanded and received air conditioners, fax machines, photostat machines and radio communication equipment.

Even steel almirahs and bookshelves. When contacted, Orissa PCCF S C Mohanti defended the "gifts", saying, "The government has permitted us to ask user agencies for equipment to help mitigate the impacts of mining, besides the mandatory compensatory afforestation."

But, when questioned how these "gifts" could help reduce impact of mining on environment, he said, "I have heard of these cases and I agree these are inappropriate. I guarantee that this will not happen from now on."

India's NMDC Seeks Iron-Ore Mine in Canada to Secure Supply

By Debarati Roy, (Bloomberg)

15th February 2008

NMDC Ltd., India's biggest iron-ore producer, plans to buy a deposit in Canada in its first overseas venture, as it seeks to increase supply of the steelmaking raw material.

The deposit contains more than 1 billion tons of iron ore, Rana Som, chairman of the Hyderabad-based company, said in a telephone interview. He declined to give details as he expects to conclude talks in a couple of months.

The deposit will increase supply for NMDC, majority-owned by the Indian government, as demand from India and China surges. Annual contract prices of the commodity have risen the past five years and may jump 80 percent from April, according to a Bloomberg News survey of four analysts published Feb. 8.

``Indian companies are in a hurry to secure supplies as China and India's demand for steel will keep prices at a record,'' Vishal Chandak, an analyst with Emkay Share & Stock Brokers Pvt., said in Mumbai.

NMDC, which supplies Essar Steel Ltd. and JSW Steel Ltd., has jumped more than fourfold in Mumbai trading in the past year. It rose 5 percent to 10,236.95 rupees at 12:51 p.m. in Mumbai.

The company will increase production of the raw material by 10 percent to 33 million metric tons in the year starting in April to meet rising demand, Director V.K. Jain said Feb. 12. The company accounts for 16 percent of India's iron ore output of 176 million tons.

New Millennium

The Canadian iron ore industry exported 30 million tons last year, according to In April, Essar's parent agreed to buy Minnesota Steel Industries LLC for an undisclosed sum to add 1.4 billion tons of iron-ore reserves and a steel mill in North America.

Canada's New Millennium Capital Corp. is looking for investments in iron-ore projects in Newfoundland, Labrador and Quebec, Robert Martin, chief executive officer of the Calgary-based company said in a telephone interview.

``We've been in contact with most of the major steel companies including Indian.''

Both Martin and Som declined to comment on whether the two companies are in talks.

NMDC said Feb. 12 it has reserves of 60 billion rupees ($1.5 billion) to fund acquisitions.

Ambassador, India, hopes to invest in Mongolia's mining industry

ULAN BATOR, (Xinhua)

15th February 2008

Indian companies are interested in investing in Mongolia's mining sector, India's envoy to Mongolia said Friday.

Indian Ambassador to Mongolia Yogeshwar Varma said at a meeting with Mongolian President Nambaryn Enkhbayar that Indian companies would be law-abiding in their cooperation with Mongolia, according to the press office of the president.

Enkhbayar said India was an important partner for Mongolia and Mongolia would like to boost economic cooperation with its partnership countries.

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