MAC: Mines and Communities

India update

Published by MAC on 2008-01-31

India update

31st January 2008

Despite leaving Orissa a few years ago, claiming that the iron deposits it investigated didn't match its standards, Rio Tinto is now keen on re-entering the field. This won't please many local people and environmentalists who have been highly critical of such mining over several years.

Friends of the Earth International (FOEI) has launched a letter-writing campaign to stop POSCO's massive Orissa-based iron and steel project in its tracks. At the same time the South Korean company has proposed a sweetened deal for the many villagers who will lose their land if the venture goes ahead.

Alleging that India's biggest aluminium producer hasn't kept its promises of compensation payments and is poisoning their agricultural water supply, so-called Land-Displaced Persons (DLPs) last week blockaded consignments of Nalco's alumina product.

The country's largest oil company - already criticised for collaborating with the Sudanese regime - has its eyes on oil sands in Canada's Alberta province. ONGC is willing to pay over a billion dollars for access to what many claim is one of the dirtiest mining-related industries around.

Rio Tinto eyes India

TNN (Times News Network, India)

28th January 2008

Rio Tinto has set its firm eyes on India. The Anglo-Australian mining giant is reviving plans to develop iron ore mines in Orissa in joint venture with Orissa Mining Corporation (OMC), it is also ready to sell Australian ore to India for the time being.

"We are well-placed in India and are quite optimistic about negotiations with the Orissa government. We will be able to bring this project to fruition," Rio Tinto chief executive (iron ore) Sam Walsh was quoted by the Australian media.

Senior OMC officials said Rio expects to export 25 million tonne (MT) iron ore annually from India by the fifth year. Rio is likely to use Paradip Port of ore exports and imports.

Paradip Port Trust (PPT) has promised them to make available a deep-draught berth with 17-18m draught throughout the year to facilitate the movement of ships of over 200,000-dwt.

Rio has 51% stake in integrated mining projects at Gandhamardan and Malanjtoli in Orissa, while the state-owned OMC holds the remaining stake.

Restive Posco may pay more to villagers

The terms of the new relief package are more generous than the provisions of the state R&R Policy.

Latha Jishnu, Business Standard

29th January 2008

On January 1 this year, Posco officials in India greeted the first sunrise of 2008 with a clenched-fist salute at Paradip Port, driving all the way from their headquarters in Bhubaneswar for this gesture.

It was what company officials call the "sunrise spirit" - an indication of Posco's determination to get its biggest foreign investment, the $12-billion integrated steel project in Orissa's Jagatsinghpur district, off the ground as early as possible.

Posco-India, the subsidiary of the South Korean steel giant, is under pressure from its headquarters to start work from the new target date of April this year - it was originally scheduled to begin work in April 2007 - and is now willing to make more concessions to resolve the biggest hurdle in its path: Land acquisition.

Posco-India needs 4,004 acres for its 12-million-tonne steel factory, power plant and captive port but acquisition of land has been stymied for the past two years by stiff resistance from two of the target villages and dissension within the ranks of another group that was initially seen as being friendly towards the foreign venture.

Towards the end of November, clashes between the different factions resulted in a police cordon being thrown around the seven villages. Even today, close to 500 policemen are stationed in the area, billeted in schools and other public institutions. One village, Dhinkia, has barricaded itself, and does not allow any official to visit it.

Posco-India Chairman and Managing Director Soungsik Cho is clearly under strain but says he is hopeful that the land issue will soon be sorted out.

Just approved by the Posco board, the company is offering separate packages for those with land and those without - the agriculture and daily wage labourers who constitute a sizeable proportion of the people who will be displaced by the biggest foreign direct investment (FDI) in India.

The area is a significant producer of betel leaves, feeding both domestic and export markets, and workers here earn around Rs 100 as daily wages.

The offer, worked out in consultation with the Orissa government, is being kept under wraps till a committee of the villagers agrees to hold talks with the company. But sources close to the development said the terms were more generous than the provisions of the state Relief and Rehabilitation (R&R) Policy, 2006.

Apart from compensation for land, which under the terms of the policy, can go up to Rs 12 lakh per acre, the package includes an unemployment allowance to displaced families till they are provided jobs at the project.

Betel-vine workers will get a percentage of the compensation that landowners will get in addition to a job entitlement card that will guarantee them an unemployment allowance till they are absorbed by Posco.

A senior Orissa government official, who was instrumental in working out the compensation package, said that it could turn into a doubled-edged sword.

"We need to get the Posco project going. Yet, we are afraid that the settlement will set a dangerous precedent for other projects in the state. It may even reopen old cases where companies have resolved their R&R (issues) with project-affected people," he says.

Posco is clearly getting restive. Cho says the board is worried by the delays and has asked him to expedite the project.

Although he maintains that the mood in the project area is now more encouraging, he admits the situation is very tough. "All big projects face problems. But this is tougher than we expected. We did not anticipate this level of resistance."

During a wide-ranging interview with Business Standard, Cho termed the demands made by the United Coordination Committee (UCC), the group which was willing to negotiate with the company unlike the Posco Pratirodh Sangarsh Samiti, which is dead set against the project, as "abnormally high".

The committee has sought Rs 25 lakh per acre for agricultural land, Rs 40 lakh per acre for their homestead land apart from jobs, monthly allowances to the elderly, and other categories. In addition, they want a 5 per cent share in the company.

"This is just a bargaining position," claims Priyabrata Patnaik, principal secretary in the commerce ministry. He is the government's nodal officer for the Posco project. "We are certain we can work out a deal with the UCC."

So far, the committee has shown no eagerness to negotiate. It has skipped three dates fixed by Patnaik. Unless the villagers also are imbued with the sunrise spirit, it seems likely that Posco will miss the 2008 deadline, too.

Urge India to abandon steel megaproject — Friends of the Earth International

by Debra Broughton, FOEI

31st January 2008

In a massive resource sell-out, India has granted South Korean multinational Pohong Steel Corporation (POSCO) permission for a huge steel mining, manufacturing and export project in Orissa state. Protesters against the project have already been violently attacked. Now police appear set to launch an armed attack as they attempt to occupy part of the 6,000 acres the government promised to POSCO at a throwaway price. Urge India to abandon unpopular steel megaproject; end violence against protesters

In a massive resource sell-out, India has granted South Korean multinational Pohong Steel Corporation (POSCO) permission for a huge iron mining, steel plant, manufacturing and export project in Orissa state. Protesters against the project have already been violently attacked. Now police appear set to launch an armed attack as they attempt to occupy part of the 6,000 acres the government promised to POSCO at a throwaway price. violent suppression

Villagers have successfully kept company officials out of the area. But with the project’s construction set to begin on 1 April, 2008, resistance organisations fear a massive police assault in the Gadkujang, Nuagaon and Dhinkia council areas.

Already, on 29 November, 2007, fifty villagers were injured as 100 armed men bombed, beat and sexually molested protesters (mostly women). The police watched the attack, then proceeded to occupy the checkpoint. the project

The widely unpopular project would reap tremendous profit to POSCO, thanks to unprecedented land, tax and export concessions from Indian governments. It allows for gigantic private iron ore mines, a 12 million ton steel plant, and a private port. To date government authorities have refused to negotiate with residents regarding the project.

Act now

Friends of the Earth Korea/ KFEM are asking you to support this action, organised by AXN Solidarity Group: a social justice/human rights/cultural-media activists based all over India who have been supporting struggle groups and communities fighting for their rights over natural resources, against human rights abuses of the state and corporations.

Let India’s Prime Minister know that the world is watching. Urge him to abandon the POSCO project, by using the form below.

It only takes 2 minutes to show the communities that the world is on their side.

E-Mail Address (Required) Please use a valid e-mail address so that you can get a reply.

Message (Required) You can edit the message but please remember to be polite.

Dr. Manmohan Singh
Prime Minister of India
South Block, Raisina Hills
New Delhi, India


I am writing to request that you abandon the POSCO integrated mining -steel plant - port project, as it is unlikely the project can be initiated without massive bloodshed. You must be aware that women and children have placed themselves at the first line of defence at the barricade, beyond which neither the state nor the corporation has been able to enter to date.

Industrialisation and development must benefit people. It cannot occur at their cost. Considering the steadfast opposition, and the willingness of people to give up their lives rather than their lands to POSCO, I am convinced this project is unjustified, even immoral. The enthusiasm shown by Orissa state and your own office in promoting the interests of this South Korean multinational is highly irregular.

To see the world's largest democracy at war with its own people is indeed a sad moment for all of us who believe in the democratic ideal. The conditions in and around the POSCO project site are nothing if not war-like. Reports of platoons of heavily armed police, frequent flare-ups of violence and bomb blasts, and posturing of state muscle do not bode well for Indian democracy.

I hope that POSCO's offer of Rs. 50,000 crores in investment is not tempting this great democracy's leaders to forget their obligations to its citizens. However, this hope may be misplaced. I am aware of newspaper reports that demonstrate your office has personally intervened to pressure agencies to grant regulatory permits, despite the considered opinions of officials that such permits should not be granted.

I appeal to your good sense and conscience to heed what the villagers of Jagatsinghpur are saying. They have said “NO” to POSCO, and I request you to end their strike by complying with their demands and abandoning the project.


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friends of the earth international
secretariat po box 19199, 1000 gd amsterdam, the netherlands
tel: 31 20 622 1369. fax: 31 20 639 2181.

NALCO-displaced persons block rail traffic

Transportation of alumina powder from mines comes to a standstill

Correspondent, Environmental Protection Group Orissa

31st January 2008

KORAPUT: Transportation of alumina powder from NALCO mines at Damanjodi in Koraput district was brought to a standstill when the Land Displaced Persons (LDP), under the leadership of Taraprasad Bahinipati, MLA [Member of the egislative Assembly] Koraput, blocked the rail traffic to the mines last Monday. The agitators blocked the rail route link to the plant by sitting on the track near the loco repair shed at Damanjodi township .

Alleging that at least 2,200 families around NALCO's bauxite mines at Damanjodi had not received their due compensation package for the differential approach adopted by the company at the time of displacing people in 1984 , Mr. Bahinipati, demanded an immediate settlement to the long-standing negligence by the company. While the company had compensated with jobs to the people for losing land at the Anugul refinery unit in the other corner of the State, jobs were given to only to the families who had lost houses for establishing the company at Damanjodi, he alleged.

Poisonous water

Among other issues, the agitators alleged that most of the agricultural land around the plant area were badly affected by the poisonous water which was seeping into the fields from the red mud pond of the company. All these farmers also had the right to be compensated against losing their source of livelihood. Moreover the company had assured in the past to provide the widows of 107 LDPs who had died while in service. But the company had failed to keep its promise till date , Mr. Bahinipati alleged

According to sources in the company, at least four goods carriage trains carry more than 12.5 thousand tonnes of alumina powder every day from the mines at Damanjodi to the refinery at Anugul.

While there were reports of the piling up of a huge amount of the mineral in the company stores for the lack of transport by rail, G.K. Behera, the executive director of NALCO at Damanjodi, said that there was no loss incurred to the company for the time being.

Further talking to the media over phone from the Corporate Office in Bhubaneswar, B.N. Swain , ED, HRD, NALCO said that the policy to compensate the affected persons differently at Angul and Damanjodi was taken up by a high-level committee under the chairmanship of the then Chief Minister in 1984 and could be dealt through discussions at different level.

However the agitators, unmoved by the assurances, were determined to continue their blockade till the company comes out with a package, Mr. Bahiniapti added.

Canada's oil sands $1billion target for Indian energy company ONGC in talks to acquire stakes in Canadian oil sands projects.


31st January 2008

Oil and Natural Gas Corp , India's top oil producer, sees buying Canadian oil sands assets as a key objective, and is in talks with several companies about gaining stakes for more than $1 billion, ONGC's chairman said on Thursday."Take a very categorical statement from me: We are seriously interested in opportunities here. I know the size of investments is going to be large," R.S. Sharma, who is also the company's managing director, told Reuters.

"We have the competence, we have the resources. It's only a question of tying up with the appropriate partners."Two years ago, Indian energy officials said they had started a search for Alberta oil sands assets as part of the country's drive to secure reserves around the world as its immense economy expands.

No deals have been announced.Since then, companies from other countries, including China, South Korea and Norway, have snapped up northern Alberta unconventional crude assets, leading some analysts to wonder how much prime acreage remains up for grabs. Sharma, during a break in a roadshow to pitch Canadian oil executives on India's latest oil exploration block licensing round, described the initial interest as more of "a curiosity.""Today it is not a curiosity. It is not an interest.

It is one of the focus areas of our investment," he said.He said ONGC -- one of the world's most active bidders for oil assets -- would consider interests in new projects or those that are already under development. But declined to say which companies his overseas acquisition team was talking to.

Canada's oil sands, the largest deposits of crude oil outside the Middle East, are the target of more than $100 billion of investment as the world's oil industry has found that returns amid surging oil prices outweigh the high cost of development.

The rush to tap the resource has stretched Canada's skilled labor supply thin, leading to multibillion-dollar cost overruns and delays at most projects.That is one reason Indian companies have been slow to jump into a major project in Alberta, said V.K. Sibal, director general of hydrocarbons for India's Ministry of Petroleum and Natural Gas."In tar sands the biggest kind of challenge is manpower, and I've discussed that a number of times (with the Alberta government) in Edmonton," Sibal said.

He said he has pushed for Alberta during visits to the provincial capital in Edmonton to persuade the federal government to find ways to relax visa requirements for Indians so they can apply their skills to oil sands projects more easily."So now the ball is in the court of Edmonton," Sibal said.


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