MAC: Mines and Communities

Indian government offers to suspend mine deals

Published by MAC on 2010-02-15
Source: Financial Times

But the devil is in the detail

Last November, India's powerful Home Affairs minister, P Chidambaram, mooted a  suspension of all mining Memorandums of Agreement, in order to quell rising opposition to extractive projects by armed Maoist guerillas. See:

Last week, the minister re-affirmed his offer, after the country's Prime Minister described the insurgency as India's biggest security threat.

But the devil is in the detail, and Chidambaram's appeal is likely to fall on unresponding ears.  

Not only has he failed to recognise the appalling reality of continued attacks on local villagers by government forces and their paramilitary supporters.

He also doesn't appear to ackowledge that hundreds of Adivasi (Indigenous) communities, nominally defended by the guerillas, are consistently being denied their basic rights under the Indian constitution and recent forest peoples' protection legislation.

Until this massive anomaly is addressed, any central government "negotiations" with the Maoists might be regarded as simply a ploy to gain breathing space for mining companies, such as Tata and Essar Steel, which have already helped finance the government's aggression.

[Comment by Nostromo Research, 9 February 2010]

New Delhi offers to suspend mine deals

By James Lamont and Martin Wolf

Financial Times

9 February 2010

New Delhi - The Indian government has offered to suspend contracts with mining companies in central and eastern parts of the country in a bid to persuade leftwing Maoist rebels to lay down their weapons.

Palaniappan Chidambaram, the home minister, said that the Indian government was seeking to bring Maoists militants to the negotiating table by insisting that mining contracts be reviewed to provide royalty payments for local communities.

"The MOUs that have been signed have not been implemented. There is no law and order for them to be implemented. When implemented [now] that mining company must pay a certain royalty that should be reinvested for their education and their development."

"We are willing to suspend all memorandums of understanding [with mining companies] until we talk to the Communist Party of India (Maoist) and review them," Mr Chidambaram told the Financial Times.

The Maoist, or Naxalite, insurgency has been described by Manmohan Singh, the prime minister, as the gravest security threat that India faces. Top officials view the insurgency as a national movement that aims to take New Delhi and topple the country's parliamentary democracy. They say it is structured like a revolutionary army into companies and battalions and supplied with weaponry sourced from the Burmese-China border.

Negotiations over mining contracts form part of a wider strategy to pacify Maoist groups and address the grievances of rural communities that have fallen under their sway.

It comes alongside an offensive launched at the end of last year to capture Maoist leaders and reclaim territory lost by the government through the deployment of paramilitary forces.

India began what is expected to be up to a three-year offensive against guerrillas active in at least 11 of the nation's 28 states in October. At least 818 people died in Maoist violence in the first 11 months of 2009 in a campaign that has targeted infrastructure and officials. Maoists are estimated to hold 33 of India's 600 districts.

In remote rural areas, such as Chhattisgarh, Maoist guerrillas seek to extend their influence at covert village meetings during which they criticise the sale of the state's iron ore and other minerals to outsiders, and accuse large companies already operating in the state of "cheating" the impoverished population.

"These are mineral rich areas," said Mr Chidambaram. "They've told the tribal peoples that this is all a capitalist conspiracy to seize their land and give it to big business to exploit the minerals. This has resonance among the tribal people because the fragile existence they lead is threatened."

India is the world's fourth largest iron ore producer, and has deposits of coal and other minerals. But poor mining practices and lax regulation are increasingly a cause of concern.

Additional reporting by Amy Kazmin

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