Theirs to mine?

Theirs to mine?

In the Kashipur block of district Rayagadh, Orissa, a 12-year-old conflict between villagers and a mining consortium shows no signs of abating.

Utkal Alumina International Limited (uail) was formed in 1992. Initially comprising of partners indal, Tata, Norway-based Norsk Hydro and Canada-based Aluminium Company of Canada (alcan), the consortium today consists of hindalco (an Aditya Birla Group Company that acquired indal) and alcan. The former is the larger partner, holding 55 per cent of uail shares; the latter holds 45 per cent. Tata and Norsk Hydro withdrew from the consortium in 1997.

By this time, people in Kashipur were turning hostile to uail 's project -- an alumina refinery plant at Doraguda near village d -Karol, coevally sourcing bauxite through open cast mining -- a grossly polluting method -- in the Bahplimali hills of village Maikanch. uail's survey work had begun secretively. Villagers were routinely told it was government work. Then, as rumours began doing the rounds that a huge project was to come up in the area, people began to mobilise. On December 1, 1993 local people met the chief minister to demand project cancellation.

Then the arrests began
Implicating villagers in false cases. Harassing. In 1996, at a mass meeting, the Prakrutika Sampads Suraksha Parishad was formed to block the plant as well as open cast mining at Bahplimali, a hill locally revered: it used road blockades, public meetings and pada yatras (foot marches) as modes of protest. And barricades. At one such barricade raised on the Maikanch village road, on December 16, 2000, police fired on a crowd of 300 protestors, killing 3 and injuring 30: the day before, Maikanch villagers had stopped political leaders from attending a 'multi-stakeholder dialogue' uail had organised at village Nuagon.

So it came to be that uail, which was supposed to begin production in 2002, was forced to reschedule the production deadline to 2005.

December 1, 2004 to ...
The tribals of Kashipur block have been existing in a state of siege, found a fact-finding mission of the People's Union for Civil Liberty (pucl) that, alarmed by reports of police firing and rape, reached village Kucheipadar -- the nerve centre of resistance -- on January 26, 2005, Republic Day, in time to witness a black-flag hoisting.

On September 7, 2004, a Kucheipadar villager narrated to the pucl team, the district administration laid the foundation stone for a police station at village d -Karol, the site of the alumina plant, and quite near Kucheipadar. Villagers in the vicinity took up another round of protests, but police forces continued to be deployed in the area. On December 1, 2004 about a 1,000 people carried out a roadblock against the proposed station. Eight platoons surrounded them. Amidst abuses hurled back and forth, the police lobbed tear-gas shells and lathi-charged.

For a month afterwards, the reprisals continued. Villagers in the area haven't been able to work their fields, or trot off to market, for fear of being picked up by the police, or goons hired, the pucl report quotes villagers as saying, by uail.

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Orissa's on overdrive

zashipur perfectly demonstrates possible overdrive in the state government's passion to liberalise mining, or industrialise all over again.

It has a strong case to so open up. Orissa contains 24.5 per cent of India's manganese reserves. It is a veritable dream destination for steel-makers, containing 25.3 per cent of India's iron ore reserves, 24.5 per cent of coal reserves, 17.5 per cent of dolomite reserves and 1.4 per cent limestone reserves. Bahplimali is just one hill; the state contains 57.5 per cent of India's bauxite reserves. There's more: 87.5 per cent of nickel and 89.9 per cent of chromite reserves.And once the Union government amended, in 1994, the Mines and Minerals (Regulation and Development) Act, 1957, allowing the inflow of private capital, both domestic and foreign, to explore and exploit 13 minerals including iron ore, manganese and nickel -- the coal sector was completely deregulated in 1997, also the year bauxite was added to this list -- there was no reason for the state to not do what the Centre had enabled.

And how. In Orissa, projects worth Rs 2,50,000 crore are likely to be implemented in the next five to ten years, a majority of them mining projects. In the last two years, Naveen Patnaik's government has also signed memoranda of understanding with 25 steel industries; if all of them go through, the state will produce a whopping 24.91 million tonnes of steel each year During 1995-1996, Orissa received the largest amount of private investments in India, both foreign and domestic, and now ranks among the top ten states in terms of investment.

To attract this investment, the state has been the perfect facilitator for entreprenuers. It acquires land around mining sites, however truculent the population may feel. It manages permission for companies from the Union government. The lease procedure has also been simplified for quick processing. In fact, it has committed 18 rivers and reservoirs for exclusive use by industry for its water-intensive activities!

A niggling doubt appears
Consider the scale of water use: In 2002-2003, Orissa produced over 52.21 million tonnes of coal, using up 10 million cubic metres of water, 50 times the total urban water supply in the state. How much will the new projects guzzle? The proposed production of steel, for instance, will require 1.2 million cubic metres of water every year, or 3,287.7 million litres per day. More than five times the total water supply to the state's 104 urban bodies, which is also mostly sourced from Orissa's 11 rivers.

Steel industries are now coming up in the river basins of the Mahanadi, Brahmani and Baitarani. According to a report by the state water resource department, by 2051, the Brahmani river system will have to import 2,288.47 million cubic metres from the Mahanadi to meet water demands. The Mahanadi's water needs for industrial use will double by that date. So it's doubtful Orissa will be able to meet water needs as committed to the steel sector.

Another niggling doubt
A consistent reason the state government produces in favour of its industrialisation overdrive is it will provide employment. State rhetoric, however, is belied by hard facts. The Orissa Economic Survey , 2002 shows that the employment potential of the mining sector has actually reduced. In Dhenkanal, Jajpur and Keonjhar districts, chromite mines employed 8,886 people in 1995-96 but only 6,679 in 1999-2000. This is also the case in the coal mines of Angul, Jharsuguda and Sundergarh districts.

At present, 20 lakh people in the state are unemployed while another 20 lakh are underemployed. Will mining and industries change things? The entire investment in Orissa will create an employment potential of only 1,75,000. Consider the proposed refinery at Kashipur. It has an employment potential of only 1,000; that too for only 20 years. Yet it will affect the lives of nearly 20,000 people in 82 villages.

Indeed, mines and plants are symptomatic of outsider incursions. Baha Kisko, a community leader of Pachwara, says, "They will never create jobs for the tribal people. Compensation money will finish in two years." Also, as Samarendra Das, an Orissa-based activist and author of a study on the political economy of mines, puts it, "A Rs one crore investment in mines results in only 7 employment opportunities. The same investment in big and medium industries creates 40.In contrast, this investment in small and cottage industry would generate 4,475 jobs."

Manas Jena, convenor of the Orissa Mines Area People Action Network, worries that mines will create huge imbalances. He says, "Our study has found hundreds of families displaced from forests are landing up in urban slums." The percentage of Scheduled Tribes (st) in Orissa living around forests has gone from 95.39 per cent in 1981 to 80 per cent in 1990. Correspondingly, urban st s increased in percentage due to deforestation that came with the establishment of various plants.

Bad economics
The state's focus is on captive use and mineral processing. Specifically, the policy stipulates a) that an application for allotment of mining lease will be considered after the applicant invests substantially in a value addition project within the state; and b) that the lease will be allotted only after the promoter has committed 50 per cent of the proposed investment.

But consider the arrangement in the joint venture that the Orissa Mining Corporation Ltd (omc) signed on with Vedanta Alumina Ltd, on October 5, 2004, to install an alumina refinery plant that would produce 1 million tonnes of the metal per year. The bauxite would be sourced from mines located in the Niyamgiri hills in Lanjigarh block, Kalahandi district. omc's stake in the joint venture is a mere 26 per cent, its share of profits restricted to mining bauxite. Vedanta will oversee the day-to-day operations of the joint venture, which is the raising contractor for the mines. In case of a rise in mining costs, omc will reimburse the joint venture. It will also pay all taxes, including sales tax and statutory duties payable in relation to the mining operation. In short, while Vedanta will run the venture, omc will shoulder all revenue obligations.

What exactly is the government getting from its projects? Take bauxite. The state-based partners in joint ventures will receive a meagre royalty of Rs 60 per tonne of bauxite mined. The alumina produced at the Kashipur refinery after it starts up -- it is a 100 per cent export-oriented venture --is to be sold at us$85 per tonne. The reserves here are estimated to last 22-23 years. By that time, uail would have earned Rs 2,88,000 crore. And the government? Rs 1,300-Rs 1,400 crore.

But state minister for steel and mines Padmanabh Behera isn't worried about being undercut. Indeed, replying to questions in the Orissa state assembly on November 2, 2004 -- the questions were related to the Lanjigarh joint venture -- the minister said the bauxite mined here would earn the state Rs 100 per tonne. At this time, bauxite from Gujarat, of lower grade, was being sold at Rs 700-Rs 800 per tonne.

In its latest report, the Comptroller and Auditor-General of India (cag) has sharply pulled up an iron-ore based joint venture. In 1995, state-owned omc entered into a joint venture with uk -based multinational mining giant Rio Tinto to set up an integrated iron ore project of 15 million tonne per annum at an estimated cost of us$800 million- us$900 million. A joint venture company was incorporated on September 18, 1995 as Rio Tinto Orissa Mining Pvt Ltd. The project was aimed at meeting iron ore requirements of new steel plants to be set up in the state and to export surplus quantities. The project involved mining lease of Gandhamardan and Malangtuli iron ore mines, a dedicated rail line to Paradip Port and the port's development.

omc duly chipped in with its equity contribution, Rs 4.26 crore in two phases. But the Malangtuli lease never saw the light of day; nor did the rail line or a better port. The report says omc's investment was not approved by the company board. It was, simply, a "futile investment".

The real violation
But all the flaws, deliberate or otherwise, pale before the following questions: what of tribal interests? How are these projects to be implemented in tribal areas, in forests and lands constitutionally protected from exploitation by non-tribal entities? The government's answer is univocal: twist the law of the land, beyond recognition.

This is exactly what it did at Lanjigarh, inhabited primarily by the Kondhs, a scheduled tribe. The joint venture was formally signed on October 2004, violating the original memorandum of understanding omc had signed with Sterlite Industries India Ltd, which was to set up both a refinery and operate a mine. Now, it looked as if two different companies were partners for the two different operations. In truth, Vedanta was an offshoot of Sterlite.

A year before the formal joint venture was signed, the chief minister had already laid the foundation for the refinery project. By that time, a reign of terror similar to that in Kashipur had descended upon villages such as Basantpada. Miraculously, the company had acquired land and begun on-site work.

As a subsequent on-site investigation by the Central Empowered Committee (cec) found out, the land was forcibly taken away from tribals in Bandagudha and Rengopali villages. Similarly, tribals cultivating land in Jaganathpur were summarily evicted, and the land transferred to Vedanta. Such actions flew in the face of state-level laws to protect tribals, such as the Orissa Scheduled Areas Transfer of Immovable Property (by Scheduled Tribe Regulation) Act, 1956 -- it forbids transfer of land to non-tribals.The atrocities committed clearly contravened Scheduled Caste and Scheduled Tribes (p revention of Atrocities) Act, 1989. And in providing land to a private company, the state had also violated s chedule v of the Constitution.

cec found that:

• Work on the refinery began without seeking clearance for 58.93 hectares of forest land that fell within the project site. This violated Union ministry of environment and forests (moef) guidelines on seeking Central clearance for such projects

• The land acquisition notice issued by the district collector on June 6, 2002, clearly stated that 47.7 hectares of forest land had been included in the project site, a gross contravention of the Forest Conservation Act, 1980 (fca)

• The rehabilitation package violated Schedule v of the constitution, for it had rendered tribals landless

• The Niyamgiri hill, which was to be mined for bauxite, was a biodiversity-rich area, and the state government had already planned to make it a part of a new elephant reserve

• Bauxite was also to be mined from nearby Karlaput, near an existing sanctuary

Today
Today, Kashipur and Lanjigarh apart, conflicts rage around bauxite mining in Lakimpur, sponge iron factories in Sundargarh, iron ore mining in Keonjhar, chromite mines in Sukinda and coal mines in Angul, Talcher and Jarsuguda.

But, if the chief minister is to be believed, "no one, but no one" can come in the way of Orissa's dream to develop. This state is ready for war against its people.

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Target: Jharkhand

It's only on the infrastructure front that the state foresees problems in handling potential growth. "We have the minerals, but are still facing a labour migration", says I D Paswan, state mining director.

The investor-friendly approach began in January 2002 with a "goodwill meeting" in New Delhi between potential investors and ministers of Jharkhand. In the 'Bombay Road show' in September the same year, domestic and global investors expressed interest in mining activities. By the World Mining Congress in November 2004, Jharkhand was more than ready for large investment. The state government has cleared 20 mining proposals worth Rs 12, 000 crore and is considering another 22 of up to Rs 40,000 crore. The government has approved six power projects, four thermal and two hydro-power stations across Jharkhand. It's only on the infrastructure front that the state foresees problems in handling potential growth. "We have the minerals, but are still facing a labour migration", says Paswan.

For the people displaced by mining activity, the state government plans to table a rehabilitation bill in the Assembly, to take care of issues like displacement, livelihood, pollution, health, education and overall development of the affected people in the mining areas. But Xavier Dias, director, Birsa Mines and Minerals Monitoring Centre, a think-tank on mining in Ranchi, feels that the coming years will see stiff statewide resistance in favour of responsible mining and ownership rights in Jharkhand. Father Benny Ekka, Director of Xavier Institute of Social Science, Ranchi, agrees, "Mining activities should be concurrent with social accountability." Will they be?

"We will die, but not leave"
That's the graffiti on the wall in Pachwara village, Pakur district, Jharkhand. This village of a thousand families could well be a barometer of what people think of their government's new-found love for mining projects. 45 protest movements are on in the state's 14 districts, all related to mining. Yet state government officials dismiss them as the work of 'unscrupulous elements'. But Rejan Guria of the Koel Karo Jan Sangathan feels protests are only going to grow. "We don't want the government to start new mining activity."

Pachwara has also decided to block mining. 15 boys and girls, holding traditionals bow and arrows, guard the barricaded village. Not even the district magistrate is allowed to enter. It was one of the first places to be chosen for 'development' once the new national policy on coalmine liberalisation, allowing state electricity boards of states to own captive coalmines anywhere in the country, was adopted in 2001. The Punjab State Electricity Board (pseb) formed a joint venture company, panem Coal Mines Limited, with Eastern Minerals Trading Agency to produce, supply, transport and deliver coal from the coalmines of Pachwara Central Block exclusively to pseb thermal power stations. The Central block envisages 44 years of open caste mining to extract 289 million tonnes of coal. The Jharkhand government hopes to get a royalty of Rs 100 crore per annum.

(see graph: Really rich)

However, Pachwara Central Block encompasses more than 1100 hectares of raiyati (sharecropped land), forest, homestead and grazing land. Official estimates say 250 families will be displaced within 10-15 years and "afterwards possibly more". The land was acquired without any prior consultation with Pachwara's gram sabha, as stipulated in Panchayati Raj Extension to Scheduled Areas Act, 1996.

The panem company has belatedly offered compensation. But the villagers are not interested. The company is all set with petrol pumps, fleets of dumpers and cranes on standby. To curb protests, state authorities have slapped arrest warrants against all but two villagers. But this has not fazed villagers at all.

Says Pachwara resident Binay Hembrom, "Goons are also sent by coal mining people to create disturbance in our village." Mithun Mirdha adds, "We have to be alert and protect our women when the coal people are around."

But villagers are optimistic about keeping the company out. As the 55-year-old Cornelius Hembrom, Pragana (headman) of Pachwara says, with a twinkle in his eye, "We will win."

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High growth